<prompt> Human: Hello friendos, and welcome back to another CoolKid PSA post. Credit score can be stressful and even confusing to some people, so Id like to clarify a few facts about the responsible use of credit, paying interest just to bump up your score, and the concept of diminishing returns. Please note, this guide assumes youve at least glanced through the credit wiki. - Responsible use. Start here if you have no credit history or really bad credit. Get a secured credit card, preferably one which you would like to use as a regular credit card as well, and put all gasgroceriesmisc living expenses on it. Pay off in full every month to reap the cash backtravel milespoints without paying interest. Repeat until you get upgraded to unsecured.Myth time!: Many people believe carrying a small balance on your credit card every month benefits credit score. Untrue! If anything, it decreases your score by increasing usage Edit for clarity: carrying a balance means leaving a small balance on your credit card, past the due date, and paying the interest on it. I am not advocating for opening a card and then not ever using it. - Paying interest just to bump your score. Ive seen several people, even users of this forum, advocating for taking out a small personal loan or car loan for the sole purpose of increasing credit score. This is entirely irresponsible. While it does work, paying interest in order to bump your credit score doesnt pay off. Why, you might ask? Because of the concept of...- Diminishing returns! If your score is anywhere within the 750s760s range, you already qualify for the best deals, lowest interest rates, etc. Please note, even if you are lower than this, I still wouldnt advocate for paying interest. Myth time 2: The Electric Bogaloo!: Many people believe that using the above tactics to increase credit score before a big purchase, such as a car loan or mortgage, will pay off in the end due to a decreased interest rate on that bigger loan. a Car loans are getting lower and lower, with many credit unions boasting a 1 or even 0 interest rate with a semi-decent score. b Mortgages can be refinanced. c using normal credit repair tactics, without paying interest, usually has the exact same effect with a marginally longer pay off time.Edit: Ok folks, yikes. Im catching a lot of flak for my statements on housing and down payments, so Im removing it. See my other post on Rent is not throwing away money for more on this if youre curious. Hope this helps some folks out there, and Merry Christmas.Edit: Removed myth 3, as it was partially incorrect. Check the below comment threads for more details by uMildly_Uninteresting  <response>: A credit score is the equivalent of Human Michelin Stars that lenders use to see how tasty you are.A good credit score means they can safely make money off you, and a bad credit score means theyll probably get food poisoning.A bad credit score doesnt mean youre a bad person, it just means youre bad at paying back money you borrowed. 