This one is pretty straight forward. You don't have to have a balance or pay interest to have a good score. Sure, you do need to have credit to build up a credit history, but paying interest has nothing to do with the credit score formula.

What counts is your positive credit behavior. Having a credit card account and paying it off at the end of each month is a smart thing to do. It helps to keep the gap between your available credit and used credit low and as a result boosts your credit score. If you have an installment loan such as a car loan you can't help but pay interest. The credit score formula does not care if you pay interest, rather it looks at your responsible use of credit.

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