Do I really need to take out car loans, get credit cards to increase credit score?

[cumulus32]

I am looking at purchasing a car for a few thousand and I do not want to take out a car loan. Is it really necessary to take out credit cards, or auto loans, to increase your score? It makes sense it would, but wouldnt your score increase with time regardless?

[justbroke]

A (FICO) credit score is based on an extremely complex formula that no one truly understands (not even a single individual at Fair Isaac). It's a model that takes into account a statistical view of all credit accounts and applies some logic that is actually known.

Certain types of credit keep your score higher, such as revolving credit, high credit limits, installment accounts (auto loans, signature loans), and real estate accounts. However, too many of those accounts, will also hurt you. For example, having more than 2 open installment accounts actually hurts your score.

It's also about using credit wisely and paying on time. Paying on time is the number one factor and your available credit to credit limits is probably the second major factor. Longevity of accounts and a "credit history", in general, also is a major factor.

[AngelinaCatHub]

Hey, you are just out of bk, so why fret? What got you into trouble? Credit, my friend. If you go a natural life, frugal, within your means, and only prepaid or Debit card, your credit will eventually climb. But why? Don't use it. If you cannot save for it, you don't need it. This bk stuff is not trivial. Once you shot your load, you can't for 8 years, do this again. Be wise and in the future economy, 'we ain't seen nutthin yet'. 'Hub