Dave Ramsey: Why not short-term disability?

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Dear Dave,

Why don’t you recommend having short-term disability insurance while doing the first three Baby Steps of your plan? It seems like a good time for it, when you’re in the beginning stages of getting your finances in order.

— Bob

Dear Bob,

Hope that helps, Bob.


Low vs. no

Dear Dave,

— Laura

Dear Laura,

No, it is not. No credit score, means you don’t have any credit or your credit score is "indeterminable." A low credit score indicates you’ve had — or still have — debt in your life, and you haven’t done a good job of paying creditors on time.

Two things will help solve the problem of having a low credit score. One is time. If you’ve had instances of late payments from years ago, time will help heal that to a degree. The older late issues become, the less they count against you.

But my guess is you two probably have some bad debt. By bad debt, I mean things that were never paid, or accounts that are in collections. If that’s the case, you need to contact those people, and settle those debts in full — and in writing — as quickly as possible. Officially close the accounts, too, before you try to buy a home.

— Dave