Managing Debt And Growing A Credti Score
I have taken something out of context to show a point.
Another person wrote the following:
"you are rewarded for debt. ...I sold my vehicle which decreased my liabilities by $10K+ and $300+/month and my fico decreased by 10+ points I still have not gotten over it! The system sucks!"
I changed some of the details to make it less personal. The point is they paid off consumer debt and their credit score went down.
The magic to credit scores has to do with demonstrating a person's ability over time to manage debt prudently. By prudently I am mostly claiming that they pay all the bills on time every month.
The hidden message, the assumption that many folks miss is???
You do not need to take out debt for things that go down in value. You can borrow and use the funds to invest in assets that go up in value over time. If it takes 2-3 years to build a long credit file you might as well be using the debt to fund things which enhance your net worth.
In this specific context, cars, holidays, cloths, general shopping and other such thnigs are not a great place to put your debt/cash to work.
I am not here to offer investment advice. I do suggest that people who want to improve their credit score by taking on some debt consider buying things that will rise in value over time.
John 
John,
Great point.
You should never take out debt on anything that loses value, if at all possible.
John, you make an awesome point. In reference to your car payment/payoff point, I wonder how long the person had the car payment for? I find that a lot of people think they can build SPECTACULAR CREDIT by taking out loans in the $5,000 to $20,000 range, pay them on time for 6 months, then pay them off in full. THIS DOES NOT HELP BUILD GREAT CREDIT. Like you said John, building great credit is done by demonstrating an ability to pay off debt over an extended period of time. I hope people will remember that!
Debts only begin to build positive history at 6 months of age. Before that, they're "too new to rate" and do nothing for your FICO score.
Would-be creditbuilders, you must plan your lives accordingly.