If you’ve followed me for any length of time, you know I’m a fan of Dave Ramsey’s approach to financial freedom. And of course, the reason I write this blog and live a frugal lifestyle is ultimately to help others get and/or stay out of debt. It is my honor to help you in any way I can – I’m here for you!
In his recent article HERE, Dave explains why a credit score is not really something you should use to determine your financial wealth since it is solely based on your debt history. Your credit score is based on five things:
* 35% of your score is based on your debt history.
* 30% is based on your debt level.
* 15% is based on the length of time you’ve been in debt.
* 10% is based on new debt.
* 10% is based on type of debt.
If debt is something you are trying to get rid of, then this type of scoring obviously does not work to determine your financial wealth. But many believe that you can’t buy a house without a good FICA score. Dave says this is not so. You can do so using Manual Underwriting. Read more about in the article link above!
The road to financial freedom includes dumping debt, saving (which includes investing when you can) and paying CASH! Don’t forget that the money available to you on credit is not your money – it’s theirs – and there is no financial freedom in that! Isn’t that what we’re all after?!
I hope that the tips and resources that are provided on this blog are helping you reach your financial freedom goals!
For more about Dave Ramsey, visit his web site HERE.