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How Making Only the Minimum Payment Affects Your Credit Score

If you pay only the minimum amount due as mentioned on your credit card statement by the payment due date, your payment shall be considered on time and your credit score shall not be affected. However, although payment of just the minimum amount due in itself does not impact your credit score, if you get into a habit of paying only the minimum amount due, over a long period of time, your credit utilisation increases, which in turn does have a negative impact on your credit score.

 

Most finance experts suggest that credit utilisation of more than 30% negatively affects your credit score. Therefore, even if you consider paying only the minimum amount due because of a financial crunch, you must ensure that your credit utilisation does not exceed 30% in order to avoid any negative impact on your credit score.

Report from Credit Card Issuers

If you pay only the minimum amount due, your card issuer would consider your payment to be on time and the same shall reflect on your credit report as well. Therefore, while the DPD in your credit report will remain unaffected, your credit report will clearly show the outstanding amount and the credit utilisation.

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