I know that most people think of credit cards as the Anti-Christ, but sometimes credit cards can shine a light on your credit. When I used to sell mortgages I would run many credit checks on my clients, one client owned a house, had no debt and paid everything in cash. Although their mortgage was paid off, they had zero credit score. According to the credit bureau, they had not had any revolving credit so they could not score my client. She was appalled and obviously annoyed. To defend the credit bureau, they had no way of scoring her. How can they tell how she would make payments? There were no payments for twenty years.
The solution was we had to get her a secured credit card and make a few payments to get her a credit score and get some history going on the bureau.
I’m not saying to go out and buy a car on your credit card, but a credit card is necessary in todays economy to keep up to date revolving payments on time to maintain a high credit score. Paying them off is great but make sure you don’t close everything so you don’t have some type of payments going in and out monthly.