Dave Ramsey Doesn't Have a Credit Score. Here's Why That May Not Work for You

There's a danger in not having a credit score at all.

Your credit score isn't just a random number. Rather, it's an indication of how trustworthy you are as a borrower. A higher credit score sends the message that you can be counted on to repay a loan on time and in full, while a lower score sends a warning that a lender may want to think twice before loaning you money.

But what if you don't have poor credit, but rather no credit? It's not such an uncommon scenario. If you're a recent college graduate, for example, who's never paid bills directly, then there may not be enough financial data on you to establish a credit score. 

But it's not just young adults who don't have credit. Some people actively choose not to establish a credit history. 

Financial expert Dave Ramsey is one of them. As a strong advocate of avoiding debt, Ramsey insists it's more than possible to go through life without credit. But while not having a credit score may work for Ramsey, it may be more difficult for you.

Why you might need a credit score

There are ways to get by in life without borrowing money. You could save up a whopping pile of cash to buy a home outright instead of having to take out a mortgage. You could save to buy a car outright and avoid having to get an auto loan. And you could forgo credit cards and simply pay for all of your purchases in cash.

But whether you're able to do those things -- and want to do them -- is a different story. It's easy for a person like Dave Ramsey to get by without a credit score. The reason? His borrowing needs are probably limited to non-existent.

Investopedia reports that as of 2021, Ramsey had a net worth of around $200 million. Most of us have a net worth that's nowhere close to that.

Now, if you had $200 million in assets and wanted to buy a $500,000 home, you probably wouldn't need a mortgage, either. And so in that case, not having a credit score wouldn't be a problem.

But what if your net worth is closer to $20,000 than $200 million? If so, you're in good company. And it means you may need to borrow money to finance large purchases, like a home or a car. That's nothing to feel bad about. And it also makes the case for establishing enough of a credit history to get a score of your own. 

Good advice, but only to a point

Ramsey thinks debt is generally bad news, and he doesn't like to see consumers get dragged down by it. In that regard, he's onto something. 

If you charge up a major credit card tab, you could get stuck losing hundreds or thousands of dollars to interest charges. That's not a good thing. 

But not all debt is created equal. Mortgage debt, for example, is a healthier type to have, even though it, too, means spending money on interest.

Should you make every effort to keep your debt -- and interest payments -- to a minimum? Absolutely. But avoiding debt entirely isn't feasible for the typical consumer, and that's something Ramsey tends to overlook. While you may want to follow his advice and minimize your debt, you don't necessarily want to end up in a position where you have no credit score at all. Doing so could limit your options and make your life harder than necessary.