Calling them scum isn't really helpful. Credit scores are a game, and you just need to learn the rules. Your example of the simulator is relevant for your situation, but you should put it into context. Someone with a $5,000 balance when their total credit limit is $10,000 will have severe credit score effects (50% utilization), while that same $5,000 balance for someone with a total credit limit of $100,000 will have minimal credit score effects (5% utilization). In your example, why not charge it, and if holding the balance at $5,000 is detrimental to you, then pay it down to $1 just before the statement closes. This gets you an actual reported balance on your credit files which helps build your credit history, and if you have a rewards card, lets you earn those rewards as well.
Debt is not necessarily bad. Most people borrow to purchase a house or vehicle. What is bad is unmanageable debt: you are struggling to make payments. Most of your income is going towards debt.
A credit card and debt are not the same. If you use a credit card, and pay the balance each month, you are not in debt.
There are times when you must have a credit card. Renting a vehicle is just once instance where you must use a credit card.
Definitely not. As a general rule, debt used to acquire income generating assets is good debt. Debt used to finance an education that will eventually land you a high paying job is good debt. Debt used to urchase your primary residence is a liability even though it was needed to purchase an appreciating asset. While not good debt, the debt used to purchase your primary residence or the car you use to commute to work is often necessary debt.
Debt used to finance a vacation or purchase things that are consumed (such as groceries) is not good debt. These debts may be needed when you are not in a position to pay cash for everything you consume, but the debt should be kept to a minimum and used responsibly. Credit card debt should be paid off in full every month, or as quickly as possible to minimize finance charges.
Since I am speaking in generalities, let me leave you with one more. Any debit used to support a lifestyle or maintain a status that is beyond your means to service is bad debt. You probably don't need the biggest house on the block in the most exclusive neighborhood. You don't need a luxury automobile to commute to work when a plain-vanilla, second-hand car will do the same job quite effectively. These things are status symbols and the debt used to acquire them could lead to a bankruptcy and/or foreclosure if you are unable to make the payments. I would put this debt in the category of bad debt.
"Issues with debt "means that you living beyond your means. Your spending is more than your income. You finance the difference between income and spending by borrowing. You are not paying off your debts at the end of each month.
Call it "hard times" or "emergencies" everyone has them. You must save, and build an emergency fund. For hard times (such as a job layoff), then you dip into your emergency fund.
if you got a 100 on a history exam does that make you an expert in History? No.
It's the CONTENT of the credit report that got you declined, not the score.
Also, where is the 702 coming from? Please don't say Credit Karma and these other so-called companies....