I'm sure Dave Ramsey is a good man and doesnt beat his wife and all that.

When it comes to financial advice, his ideas are pretty stupid for people who are disciplined enough to manage their debts and investments wisely.

His advice is kind of like dealing with an alchoholic. With a normal person its fine to have an occasional drink or two, but with a recovering alchoholic, you need to have zero tolerance. They cant have a drop or they will just fall right back into the gutter. Dave Ramsey's advice is good for debtaholics, people who are too immature or foolish to manage their impulses to buy and borrow unwisely.

For everyone else with good credit and discipline, paying cash instead of borrowing at under 4.5% after-tax interest is equivalent to throwing money down a rathole. If you take the upfront cash or the extra principle payments you would have made and invested it instead in a broadly-diversified portfolio of funds over the long haul, when the mortgage is finally paid off you will be wealthier than the guy who paid it off earlier.

Dave Ramsey also believes that you should never use credit cards at all, which is just plain stupid. Again, if you are mature and disciplined enough to pay the balance off every month, its not hard to find credit card companies willing to pay you free money and airline miles for giving their card the action and processing fee that the merchant has to pay them. Its pretty simple: whether I write a check or use my card and pay the balance, I have a certain amount of money I have to spend every month to live. I can either write the check/use cash, or I can charge it all and pay the balance off. Same money is spent either way, except my credit card company is willing to give me a 1% kickback for giving their card some action and processing fees received from the stores.

By dealing only in cash and not having credit cards, over time your credit will return a "no-hit" or a "no-score", which is basically about as bad as having bad credit, preventing you from ever being able to borrow at good rates if you need the money.

1. All 3 can be printed instantly
2. Your own pulls have ZERO affect on your credit rating
3. You must send notice to ALL three agencies if they all show a problem. Not all problems may even show on the 3 reports, thats why it's important to get all 3.

It depends. Having too high of a credit line can be a liability. How long have the accounts been open? The older accounts are helping your score by showing longevity. My advice would be take a look at the nine. Close all but the 3 or 4 longest held accounts, assuming they are years old and have decent limits.

and that's pretty much my point...

Why would anyone with enough money to buy a house up front, in full, actually do it?! Hire a freaking financial adviser and invest for the future...

Hard to miss a payment when you're daddy's makin em.

reeruned? Maybe not. Bad financial practice, absolutely. Interest on a house is going to be at most 6.5%, then you get to deduct those interest payments on your income taxes. Meanwhile it is pretty easy to invest and make a 10% dividend per year, so paying cash for a house is a bad financial strategy.

The only reason I can think of is if you are in a low tax bracket and your credit is so terrible (or you have no credit since you only deal in cash) that you have to take out an 8% mortgage. In that case... eh, for someone who is very nervous and faint-hearted about the market, paying it off is kind of like buying an 8% guaranteed CD, which isnt too bad.

If you have the ability to get a 5-5.5% mortgage and you are in the 25% or higher tax bracket, then paying it off early is just stupid. I wouldnt get a warm fuzzy feeling from paying off the mortgage so that I can be land-rich and cash-poor later on thinking about a reverse mortgage to get half of it back. I'm only interested in making as much money for my retirement as possible. A home is just a structure built on a patch of dirt where I can sleep without freezing or getting rained on.

absolutely. The only reason to pay cash for a house is if you're a multi-multi-multi millionaire, and don't care about the tax and financial advantages.

Well, at least you're getting more creative with your names Marlboro...

It's that time of year again.

I thought that perhaps this was a new thread warning people that the "Freecreditreport.com" site is, in fact, ran by one of the bureaus (I want to say TransUnion, but it may be Experian) and is a total ripoff.

As someone who writes articles on personal finance for a living, I've read numerous horror stories about all the sites claiming to give free reports. All but annualcreditreport.com will sign you up for a monthly service costing from $9 - $20 a month, often without really letting you know they're doing so.

So yeah ... everyone get their ass over to annualcreditreport.com and get your copies today. Just be forewarned that getting one from TransUnion is nearly impossible.

MM
~~:thumb:

Is it true that bad credit marks disappear in 7 yrs??

It depends on what you mean by "bad credit marks" and "disappear."

Bankruptcies are listed on your report for 7 - 13 years, depending on which chapter you file. After that, the notice is removed.

A missed payment won't actually "disappear" -- it will be listed as a red square amongst a bunch of green ones (or hopefully a bunch of green ones) in your payment history to the creditor in question.

But overall, yes, the records on your report usually only go back about 7 years or so. Your credit score, however, is cumulative and will reflect your entire credit history.

Hope that helps.

MM
~~:)

Why do we have credit, why cant they just take my ****ing word on it?

Also, how much do student loans affect your credit, and the credit of a cosigner?

If it helps, $32,000, soon to be ~$39,000 in loans.

My sister has some old CC bills that are 6 yrs old. Are they going to be gone from her credit report soon.

She's thinking about filing bankruptcy, and I'm trying to figure out if it would be best for her to just wait it out.