Friend and freelance writer Les O’Dell shares this diary entry from the fifth session of Financial Peace University, a 13-week course from national talk-show host Dave Ramsey.
One More Myth
Carrying over the team of debunking myths that he used in the fourth lesson, Ramsey teaches in the fifth lesson of Financial Peace University that there is one additional myth: the importance of the almighty credit score. He explained how a credit score is calculated (calling it an “I love debt” score) and explaining how people actually can live without worrying about—or even having—a credit score.
An extensive discussion of credit bureaus and credit reporting agencies followed. Ramsey shared how these reports work and how a vast majority of them contain errors—often damaging mistakes. Recommending checking your report at least annually, Ramsey taught how to correct errors on credit reports.
As one of the fastest-growing crimes in the nation, identity theft was a main focus of the evening’s teaching. We learned what to do and how to proceed if someone stole our identity and how to work to fix problems a theft causes. Identity theft insurance was also discussed and recommended by Ramsey.
Turning to the more seedy side of the evening’s discussion, Ramsey presented horror stories of debt collectors and some of the tactics they use, some of which are illegal and many of which are completely unethical. He shared protections provided in the Federal Fair Debt Collection Practices Act and provided suggestions on how to deal with calls and threats from collectors.
A variety of forms and materials were provided in the workbook for this class session including a pro-rata budget plan to help users determine how much to pay on old debts as well as sample letters for correspondence with creditors or collectors.
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Break Out Session
Following the DVD portion of the session, we broke into smaller groups for a time of discussion and sharing. Several people in our group told of bad experiences with creditors. In fact, no one had anything positive to say about their experiences with collection agencies and collectors.
Our small group leader then asked everyone how they were doing with their budgets and the Baby Steps so far. Then, unveiling a pair of super-size scissors, he asked if anyone wanted to do a “plasectomy”, that is, cut up their credit cards. My wife and I haven’t had any credit cards for several years, so we joined in encouraging others to kill their cards. Despite our urging, no one reached for their wallets. Perhaps to get things started, he removed his own electronics retailer’s card and began to cut it into small strips.
He then turned to his wife and asked for her favorite credit card, one from a national clothing retailer. She flat refused. He pleaded. She still refused. She told him that the card “gave her a sense of security.” He pleaded again and we piped in with encouragement. She still wouldn’t subject her card to the scissors.
We were blown away. I couldn’t believe it. Here were individuals who were supposed to be leading the small group and they weren’t getting rid of all of their cards, nor were they on the same page as a couple. It wasn’t a very good example to the rest of the group, in my opinion. I sure hope Dave doesn’t hear about it. We can only hope she’ll cut it up next week.
Les O’Dell is a freelance writer living in Carbondale, Ill. His work can be seen in a number of newspapers, magazines, publications and websites. He is co-author of the popular “He Said, SheSaid newspaper column. He can be found on the web at www.lesodell.net. Les is not affiliated or endorsed by LPL Financial.