'It's A Bankers' Scam' – Dave Ramsey Blasts The FICO Score System: I Can't Rent An Apartment, But I Can Write A Check For The Whole Complex

Dave Ramsey has never been shy about sharing his opinions on financial systems and this time, he took on one of the most entrenched ideas in personal finance: the FICO score. In a video addressing criticisms of his 7 Baby Steps Program, Ramsey called the FICO score system a "Bankers' scam" designed to keep Americans stuck in a cycle of debt.

You Need a Credit Card to Build a Credit

Many financial advisors claim that building your credit score is essential, so you need a credit card. Ramsey debunks this myth by explaining that the FICO score isn't about financial success but rather how well you interact with debt. In fact, 100% of your FICO score is based on debt-related factors:

• 35%: Your payment history on debts.
• 30%: The amount of debt you owe.
• 15%: How long you've been in debt.
• 10%: Types of debt.
• 10%: New debt taken on.

Don't Miss:

• These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends
• Are you rich? Here’s what Americans think you need to be considered wealthy.

"You could inherit a million dollars tomorrow or get a million-dollar raise at work and it wouldn't improve your FICO score one bit," Ramsey points out. Why? Because the system only cares about how you manage debt, not your actual wealth.

The FICO Score Benefits Banks, Not You

Ramsey emphasizes that the FICO score was created by Fair Isaac Corporation (FICO) to help banks evaluate how profitable you'll be as a borrower. "Guess who loves FICO? All the banks, because the whole purpose of FICO is to get you into debt so that you can run your score up so that you can get into debt so that you can run your score," he says.

In a sharp critique, Ramsey notes that many people with high FICO scores have paid tens of thousands of dollars in interest over time, effectively rewarding the banks. That's why he noted, "If you've got an 800 credit score, it has nothing to do with whether you're winning financially."

See Also: This 12,000 RPM Spinning Battery With Over $100 Million In LOIs Could Be The Missing Link For Green Energy — Here’s Why Early Investors Are Flocking To Invest Before Funding Closes

The Ridiculous Reality

To highlight the absurdity of the system, Ramsey shares a personal story. Despite being able to write a check to buy an entire apartment complex, he can't rent an apartment because he doesn't have a FICO score, as he famously avoids debt altogether.

He says a 26-year-old at the leasing office is following a checklist that says you need a credit score to rent. Never mind the fact that Ramsey could buy the whole building outright. "This is how asinine this is," Ramsey says. "This is stupid and the idea that we all fell for this crap is ridiculous."

Chasing the Wrong Goals

Ramsey argues that the cultural obsession with FICO scores has led many Americans to worship the "Great FICO," as if it's the ultimate measure of financial success. But he stresses that real wealth comes from avoiding debt and building assets – not chasing a high credit score.

Trending: ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.

Dave Ramsey advises stopping chasing a FICO score and starting to focus on building actual wealth. The system is rigged to benefit banks, not consumers and falling into the debt trap makes it harder to achieve financial independence. Instead of playing by the rules of the "Bankers' scam," Ramsey recommends breaking free by avoiding debt altogether.

While Ramsey critiques the FICO score system, it's worth noting that having a (good) credit score can make certain financial processes smoother. For those who use debt responsibly, a good FICO score can help secure lower interest rates on mortgages, car loans or other financing options. This can result in significant savings over time, especially for individuals who plan to finance large purchases. The key is to avoid becoming overly reliant on debt and to use credit as a tool rather than a crutch.

Read Next:

• Jeff Bezos-Backed Arrived Homes Hits A Big Sale On Charlotte Property – Investors Earning A 34.7% Return
• How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.