For some reason, we humans very deeply believe in "No pain, no gain". This, mixed with honest ignorance perpetuates myths like the loan idea you shared.
Trust me, I was actually given exactly the same idea by many people, including a member of a credit union when I was looking for options to establish my credit 6 months ago.
The only voice of sanity, and I cannot thank them enough now, were those of the very people who have answered your question and commented.
Scoring with credit cards is really simple:
- You take on loans through your credit cards (aka purchase stuff and pay bills)
- Before your creditor reports your balance to the CRAs, ensure it's in the 1 - 9% range, but NEVER 0%!
- Sign up for credit monitoring, often for free, and ensure your creditors are reporting correctly.
- Watch your score go up
The honest ignorance I was taking about is when people pay their outstanding card balance in full before their creditor reports their balance to the CRAs.
This puts their utilization in the 0% bracket - which is as bad for your score as people get who don't now how to manage credit.
Yes, it's as easy as 1-2-3.