Let's say, for instance, I have $100 due at month's end, and a $15 minimum payment. If I decided to pay off the $15 and defer the rest until next month (with interest I suppose, though I don't know for sure because I have always paid the full amount on time), would that adversely affect my credit rating?
2006-08-14 08:20:33 · 21 answers · asked by Anonymous in Business & Finance ➔ Credit
No, as long as you pay the minimum and are not late.
2006-08-14 08:23:21 · answer #1 · answered by Anonymous · 1⤊ 0⤋
It could go either way depending on the amount you owe. Say you have a credit limit of $500 and you only owe $100, so you just pay the $15 minimum due. That will help your credit score because you owe "something, but not too much" and are paying it off on time. However, if you have a $500 limit and you owe $450 and you only pay the minimum it makes it look like you are getting in over your head and owe more than you can afford to pay, so it could lower your score. Credit scores can be a slippery slope.
And, yes, you will be charged interest on the balance left at the end of each month, but good for you for being able to pay in full each time. Wish I could!
2006-08-14 08:32:29 · answer #2 · answered by Kate 3 · 0⤊ 0⤋
Actually the credit companies EXPECT the minimum payment or will it will negatively affect your credit. Let's say your minimum payment is $50 and your total balance is $1500. If you pay nothing or less than the minimum payment, you will get a "late" on your credit. If you pay $50-100, you will not get a late. However, depending on your interest rate & if you make additional purchases, the payment the following month may be more or less. The best thing to do on larger credit balances is to pay on them for at least a few months, then pay them off if you can. Its a big game with many rules, but you have to learn how to play. One extra tip: If you have two credit cards, one with a credit limit of $500 and one with $5000, did you know it's worse for your credit to have $400 charged on the $500 card than $2000 on your $5000 card? Its because with the $500 card, $400 is WAY over half of your max on that card. Ridiculous, but you need to know how to make your credit work for you. Good luck!
2006-08-14 08:33:52 · answer #3 · answered by madjazz 2 · 0⤊ 0⤋
It is a balancing act. If you always pay it off at the end of the month then you have no credit history. If you leave a high balance for months and pay the minimum, then it is held against you. The rule of thumb is don't go beyond 50% of your limit if you are making payments, and then pay more than the minimum charge each month.
2006-08-14 08:28:26 · answer #4 · answered by yes_its_me 7 · 0⤊ 0⤋
You can look at it in two ways. On the positive end, as long as you are paying off the minimum every month on time, you are showing responsibility in paying off your bills, which aids your credit score. However, if you are close to the max on your credit limit, that does not help your credit score. The best thing to do is pay at least the minimum off, but try to pay as much as possible. Also try to keep your outstanding purchases to about 30% of your limit
2006-08-14 08:27:46 · answer #5 · answered by Chaga 4 · 0⤊ 0⤋
Not really. It would show that you've always made payment (at least the minimum), on time, etc... which looks great on your credit file. Credit companies prefer that you pay the minimum payment, that way they can get more money out of you long term, through interest.
But at the end of the day, it does not affect your credit score.
2006-08-14 08:54:11 · answer #6 · answered by Anonymous · 0⤊ 0⤋
The percentage of debt that you have on the card is what's important. Having a balance is GOOD for credit standing, but it should be a low percentage balance (like 10-20% of your credit limit). Creditors know how much credit you have on your credit line, what you min pmt is, and the highest level of debt on the card. Making min pmts won't affect your credit score negatively, but if you're close to the max limit, it looks bad.
2006-08-14 08:27:53 · answer #7 · answered by heffinator 2 · 0⤊ 0⤋
Well not by much. It wont' affect it negatively. It'll just show that your current on your payments, and your credit score will go up. Now if you paid more then the minimum, it'll score higher on your credit rating because the current accounts are paid for fully or your balance is less because of it
2006-08-14 08:24:57 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Don't pay the minimum if you can afford to pay more! It won't result in a negative credit rating, But...paying the minimum maximizes your credit card debt! Use this calculator, and you'll see what I mean: http://www.inforeferral.com/calculators/calculator23.htm
If your interested in raising your score, here are some tips!
http://www.funditmortgage.com/mortgagebasics.aspx?id=8&mid=1
2006-08-14 09:35:34 · answer #9 · answered by MiLuv 4 · 0⤊ 0⤋
No, steady payments, even if just the minimum, are part of what builds your credit.
The only time paying in full on a credit card really helps you is if you're late and facing collection or have been charged off.
2006-08-14 08:57:05 · answer #10 · answered by Anonymous · 0⤊ 0⤋
just paying the minimum will not adversely affect your credite, however, carrying a lower balance can give you a higher score. one of the things credit ratings look at is the distance between your balance adn your limit. the greater the gap, the higher your score will be
2006-08-14 08:26:21 · answer #11 · answered by e fitz 4 · 0⤊ 0⤋