Many readers are echoing the experience of this one:
I'm one of those "deadbeats" your reader refers to. I have credit cards, I've never carried a balance on any of them, and the only loan I've carried in the past 25 years is my mortgage. I save for large purchases like cars, and then pay cash. I wouldn't normally check my credit rating, but after my mortgage lender was hacked a few years ago, I got to see my Experian Plus credit score for a couple years. During that time, my score fluctuated between 799 and 803, which I understand is pretty good – the maximum Plus score is 830. Livestrong reports that 10% of consumers have a Plus score above 790, so I'm not in super-exclusive company, but I'm in the top 10%. All without ever carrying a balance on a credit card or any loan other than a mortgage for the past 25 years.
I might be referred to as a deadbeat by my credit card companies, but they don't calculate my credit score; they buy it. If you want to see the relationship between credit score and the likelihood of paying back a loan, take a look at the data provided by peer-to-peer lending sites like prosper.com. On Prosper's introductory statistics page, they list the loss percentage vs average credit score.
So contrary to what your reader believes, lower credit scores correlate strongly with higher rates of default: loans to people with credit scores around 650 have a loss rate 4.5 times that for people with credit scores around 815.
Another:
As I understood it from a former Wells Fargo Credit Analyst, the second most important part of your credit score is level of debt, measured by "credit utilization." In so many words, "credit utilization" is your total outstanding balance from all sources divided by the total credit limit your have from all sources. Having a high credit card balance (relative to your card’s limit) increases your credit utilization and decreases your credit score. Conversely, paying it off every month creates a smaller ratio and increases your score.
And, while it is counter intuitive, it's in your best interest for you to never to close a credit card account – keeping it open maximizes the amount of available credit relative to your outstanding balance (or lack thereof.)
Another:
I'd like to correct the assertion made by your reader yesterday that always paying the monthly bill in full will keep your credit score low. As a volunteer with a city outreach program, I've coached people in financial difficulty on getting out of debt and interpreting their credit reports to improve their scores. If the reader who wrote in is basing his assertion on personal experience, I suspect he may be an under-utilizer of credit. Factors like length of credit history, mix of different kinds of credit (revolving and installment), not having too much or too little available credit, all impact the score, so someone who is credit-averse may be stuck with a low score for other reasons than responsible bill paying.
The Dish 