Highlights from the Dave Ramsey Show

Question: Stephanie in Texas says her dad co-signed a car for her before she started her Baby Steps. She missed some payments, and it affected their relationship. She paid off the car, but she wants to know how to heal the relationship with her father.

Dave Ramsey's advice: That's partially up to your dad to be willing to let it heal. If he's placing too much emphasis on something that happened several years ago when you were a kid, he's partly culpable because he was stupid enough to co-sign. I think if you haven't, you apologize for the damage that it did and you want to make sure that anything that you've done wrong that you can make that right. I think you've done all of that. But say that out loud and, "Dad, I'm getting on this program to learn how to handle money so that I never do that again." If he cannot accept that apology and move forward given that he was part of the equation, then that's on him. Other than that, the only thing that heals stuff like this is just time. The more time that elapses, the better his perspective may be.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!

Question: Corrina in Los Angeles is calling because her son and his wife inherited some money. They want to buy a house, but they don't have good credit. Her son has two repossessions, but it's been a couple of years since it happened. He asked Corrina to co-sign a credit card for him. Should she do it? Dave has another idea.

Dave Ramsey's advice: I think the goal of getting a home is a good goal. We need to go down into the situation and figure out what caused the bad credit. If he has two repossessions that the deficit balance is still outstanding on, he's got to go clean those up before anything starts moving. If he still owes those banks money, he's got to go settle that debt.

If he will not borrow any more money and if all of his accounts are closed and paid, very soon his FICO score will be zero. If you go get him a credit card, you're going to mess that up because you do want either a very high credit score or a zero credit score in order to get a mortgage. Some mortgage companies are so stupid the only thing they know how to do is high credit score. Lots of mortgage companies know how to get you a loan with zero credit score. If you've paid your landlord early or on time for two years and you can get them to sign off on that, you've got no bad credit outstanding, no slow pays for the last two years, you have a good strong job and had that for two years, a good down payment, and you have a zero credit score, you can qualify for a traditional mortgage. I think if your son knew that information, he wouldn't be asking his mother to get a credit card for him.

My answer to your question, should you get a credit card in order to help them get a house, is first off, it's not necessary. Second, I think it would be a really stupid idea because you're going to get yourself in a mess with your son. Third, it's not necessary. Fourth, it's not necessary. The best way for him to get a house is to get his act together, start paying his bills on time, clean up the old bad debt, and then he'll be in a position to get a home very quickly with a zero credit score.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!

Question: Ken in Grand Rapids co-signed for his sister to move into an apartment. She moved out of the apartment last year but ran up a lot of bills, and now Ken is getting the bills and collection notices. Dave suggests paying them and chalking it up to stupid tax.

Dave Ramsey's advice: So the net result of co-signing is that you lose contact with your own sister that you were trying to help. How sad.

Here's what I would do: I would call the sister and leave her a message that just says, "I love you more than $911. I'm going to pay it. Don't worry about it. Forget it." It's your fault, too. You were stupid for co-signing. It's stupid tax. Don't do that kind of stuff again because it will cost you relationships.

Then you have to call the people at the apartment and try to get some kind of a settlement. Whatever you do, get it in writing before you give them any money. I would try to negotiate it. I would say, "I don't have a lot of money here. My sister sprung this thing on me. I had no idea." Whine a little bit and then offer them an odd amount. Just make up an odd figure so that it sounds like you really thought it out. Offer them that, and when you get it in writing that they will accept that as settlement in full, then and only then do you send them money in the form of a cashier's check--no electronic access to your checking account. They will clean you out.

It's not worth it. It's $900. Settle it and tell her she's forgiven and get it out of your life. You're going to chalk it up to something stupid you did, and never co-sign again.

When you do something stupid with money and it costs you money, we call that stupid tax. Sometimes, you just chalk it up to the tuition of the school of life. You never co-sign--ever--for anything under any circumstances. You have to love someone enough to say no.

Hear the call!

Download Dave's show, commercial free, right here!

Podcast Dave's show!