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yes take his example to the farthest outlier to try and avoid the point.

You can buy a used car for cash or for cheap, kick the credit cards and get a 15-yr mortgage on a house.

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I didn't say NEVER use credit. Obviously for larger purchases such as a home and maybe a new vehicle it is better to use credit. But for EVERYTHING else there is cash and debit cards (for online transactions).

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You just made thejokker's point: if you have more than enough money and pay for everything without using a credit card you'll have a lower credit rating than when you use the credit card and pay the cc-bills within a month. They're breeding bank slaves that way.

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He specifically said "You keep a balance on credit cards", which is usually taken to mean that you keep a balance from bill to bill, as opposed to paying in full every month. That's how I've always heard that used, though I admit that he could have meant using cards at all. Besides, I have enough money to pay for my stuff in cash, but I often pay with a credit card and come home that night and schedule a payment right away, specifically to improve my credit score at the CC company's expense, since they make nothing off of me personally if I never keep a balance from month to month.

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From what I've read, keeping a month-to-month balance on your cards helps increase your credit score. Thus proving to the lender that you are willing to take on debt in manageable amounts which provides interest revenue for the lenders.

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Makeup of the credit score


The approximate makeup of the FICO score used by U.S. lenders
Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulas for calculating credit scores are closely-guarded secrets, FICO has disclosed the following components and the approximate weighted contribution of each: [10]
35% — Payment History – Late payments on bills, such as a mortgage, credit card or automobile loan, can cause a consumer’s FICO score to drop. Paying bills as agreed over time will improve a consumer’s FICO score.[11]
30% — Credit Utilization – The ratio of current revolving debt (such as credit card balances) to the total available revolving credit (credit limits). Consumers can improve their FICO scores by paying off debt and lowering their utilization ratio.[12] Alternatively, applying for and receiving the credit limit increase will also drive down the utilization ratio. Closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on their FICO score.
15% — Length of Credit History – As consumer’s credit history ages, assuming they pay their bills, it can have a positive impact on their FICO score.[13]
10% — Types of Credit Used (installment, revolving, consumer finance, mortgage) – Consumers can benefit by having a history of managing different types of credit.[14]
10% — Recent search for credit and/or amount of credit obtained recently – Multiple credit inquiries for a consumer seeking to open new credit, such as credit cards, retail store accounts, and personal loans, can hurt an individual’s score. Applying for lots of new credit in a short period of time is also viewed as risky and can cause a drop in an individual’s score. However, individuals shopping for a mortgage or auto loan over a short period will likely not experience a decrease in their scores as a result of these types of inquiries.[15]
http://en.wikipedia.org/wiki/Credit_score_(United_States)

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