Premium hike angers debt-free woman

By Dave Ramsey

Published: October 9, 2008

DEAR DAVE: I just received notice that my homeowner’s insurance is about to increase $200 because my FICO score dropped. I recently became debt-free, so I know this score will continue to drop. I’m confused and angry about this. What should I do?

Shelly

DEAR SHELLY: I don’t blame you for being mad. This is an absurd thing that’s happening in the insurance industry.

The majority of low FICO scores are because the people attached to them don’t pay their bills or don’t pay them on time. But people who don’t have any debt — like you and me — have to pay the price because, according to their rules, no debt equals a low credit score.

I would tell them that an increase in my premium of $200 is a strong indicator that I’m going to find another insurance company, and that they can go jump in the lake. I think I’d also get in touch with an independent insurance broker and let him try to make a market for you.

Do everything you can, Shelly, to keep from giving your business to a company like this.

DEAR DAVE: My boyfriend has a lot of debt. The other day, a creditor called, and he wouldn’t answer the telephone. Then he told me it would be easier for him to pay off his debts if we were married because I could act as his accountability partner. I don’t want to be the money cop, but I wonder if he truly would be more motivated.

Janine

DEAR JANINE: Someone who isn’t making headway in getting out of debt while they’re single probably isn’t going to completely turn around just because he gets married. I mean, you can act as his accountability partner if you want, but you don’t have to get married to do so. In fact, dating is probably a better way to do this because you can determine whether he’s really changing or just trying to get you on board to help him pay his bills.

Don’t misunderstand, Janine. Debt, in itself, doesn’t keep someone from being marriage material. But you’re definitely not marriage material if you don’t work, you’re irresponsible, you haven’t taken control of your life, have no character or can’t manage your behaviors. These kinds of people are going to stay in debt and not be able to pay their bills for the rest of their lives. And if you marry someone like this, he will drag you around and through all that mess, too.

I’d say date this guy a little longer, just to see if he’s serious about changing. But don’t get engaged yet, and don’t pay one penny of his bills for him.

DEAR DAVE: How much would you allow people to borrow to go to college? I can’t afford the cost of higher education without borrowing the money.

John

DEAR JOHN: Let me tell you something. There are a lot of good universities out there that charge about $5,000 per semester for in-state tuition.

That’s less than $1,000 a month, and you can make that kind of money with a good part-time job.

If you want to stay in a dorm or eat on the meal plan, it will cost more. But there are tons of scholarships and financial aid packages out there, as well.

Just don’t have filet mignon taste when you’ve got a hamburger wallet.

E-mail questions for Dave Ramsey to davesays@daveramsey.com. For more financial advice, go online to www.davesays.org or call (888) 227-3223.

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