About four years ago my baby brother was laid off from his job and had trouble finding another one in his field, so he took the first job he could get and went from 70k a year down to about $11.00 an hour. It took him about a year to find a job in his career field and get back up to his previous salary. In that year though he lost his house and got behind on all of his credit card bills to the point that he was forced to go to one of those consumer credit places in order to work out a payment plan. He did keep up on his two car payments though.
To make a long story short, he completely paid off all of the bills he was behind on about 18 months ago. In the meantime his wife finished up her degree and the two of them now make a combined income of about 130k a year. He got rid of his two credit cards as he paid them off. And here's the crux of his problem.
He recently tried purchasing a new (used) car. It cost 20k. They had 10k saved up. He was turned down. Even though he paid off all of his bills, had 50% of the cost of the vehicle, and has a combined income of about 130k, he was turned down due to a bad credit rating. He knew his credit rating was lower than it was but assumed that it had been climbing back up as he paid off his debt.
Nope. Come to find out that as long as he doesn't obtain and use a couple of credit cards on a regular basis his credit rating will not go up. According to "the experts" not even having a revolving loan at a bank will help. So basically this whole credit score industry is a scam to try and force people to get themselves hooked on credit cards.
So my brother said screw it and bought a 10k car with cash and is now taking the payments he would have made on the new car and putting in the savings account a long with other some other money and will save up until he has enough to pay cash.
Anyway, I'd hate to see what my credit rating is because I got rid of my cc's about ten years ago and pay cash for everything. The whole credit rating industry is a scam created to try and force people to get credit cards knowing that a certain percentage of them will be irresponsible or will rely on them in "emergency" situations in order to keep their heads above water.