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How much over the minimum payment should I pay to avoid getting the 'marker'
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Thanks Anthorn - yes, good points.
I think I was a bit taken aback by the letter from my bank as I've never had anything like this from them before.
I'm learning a lot!0 -
The last time I looked at my Noddle/Callcredit report the 'Minimum Payment:' field had the entry ''Y' for one of my credit cards. That is what I understand by the term 'minimum payment marker'.
In that case all information in the different parts of a credit report must similarly be "Markers": Minimum Payment Marker? Credit Limit marker? Up To Date marker? Cash Advance Marker?
There are no such markers which in themselves affect a credit report. What affects a credit report is repetitive information with which lenders create patterns of behavior.0 -
What affects a credit report is repetitive information with which lenders create patterns of behavior.
Agreed. Repeatedly paying the minimum or marginally above the minimum payment (a 'marker') on a credit card balance may be taken as an indication of financial difficulties, a progression towards non-payment or perhaps even a default on a credit agreement. So, the minimum payment marker can be very useful information to creditors. Of course, as we know from those who stooze, this may not be an issue at all to some creditors but at the same time it may be an issue to others.0 -
Sally, do you have other credit cards? Are you paying the minimum on them too, or just this promo rate? Are you aiming to apply for more credit soon?
Your score is irrelevant, creditors will look at your file and see that on one card you have taken advantage of a promo rate and paying the minimum back. As has said there are those that stooze and seem to have no problem getting new cards with promos.
Unless you need to apply for credit in the next year, keep it at a minimum, so long as you have funds to pay it off when the time comes (up it for the final 6 months if it concerns you). You are keeping utilisation at well under 50%.0 -
SallySaunders wrote: »Thanks HeCh
Your point about minimum payment plus 10% sounds like it might be right.
As mentioned above, there is a sentence in the letter which says that the bank has noted that payment is: "in line with or just over the minimum payment due".
This seems to indicate that just adding £1 wouldn't work.
Though as ZX81 and Ebe_Scrooge note, a promotional offer marker seems to cancel out the minimum payment marker ...
Mmm, quite tempted just to pay the whole thing off now and forget about it!
That letter is only sent out because they are required to inform customers that paying the minimum payment or slightly above it will mean they take a long time to pay it off (usually with higher amount of interest).
This letter has no relation to the minimum payment marker on credit reports. Which in my experience is not applied when you pay minimum payment + £1. Although i have only done this on one card to try it out.0 -
@nic_c Thanks for the message.
I have one other card - Halifax 41 months at 0% promo rate - also on minimum payment but I've only just opened that one. Will make sure to pay slightly over the minimum. I don't intend to apply for any more credit.
I have £15000 in savings, so could pay balances off in full if necessary. But I wanted to make a few significant purchases this year (upgrade car and bathroom), so thought I'd take advantage of these offers for a couple of years rather than dip into savings. This means I can carry on building up the savings for a few years!
Seems from the feedback I'm getting that I'm OK with just minimum + a small %. Think I was just a bit shocked to get a letter like that from the bank. Should have come on here and done some research *before* I opened the accounts!
S0 -
@takman
Many thanks, yes, I think I've realized now that there are two separate things going on here. The letter which came from my bank (which they're obliged to send) vs what may or may not be appearing on external credit reports.
Think I'll just go for 10% over the minimum payment and leave it at that for now.
S0 -
I used to work in data analysis - nothing to do with finance - and my guess is the way they look at people's credit data is way more sophisticated than looking for simple flags like a min payment maker. If they care about minimum payments they'd be wise to people paying a bit extra to avoid getting a 'mark'.0
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shortcrust wrote: »I used to work in data analysis - nothing to do with finance - and my guess is the way they look at people's credit data is way more sophisticated than looking for simple flags like a min payment maker. If they care about minimum payments they'd be wise to people paying a bit extra to avoid getting a 'mark'.
The minimum payment marker is taken into consideration but obviously it's used in conjunction with a lot of other factors when they determine credit worthiness.
If someone had a credit history that is a bit dodgy, is paying interest on a card with a "high" balance and not paying it off in full each month. Whether or not they have any minimum payment flags may be the difference between them being accepted or not for new credit because it shows how well they manage their finances.
There is plenty of data that shows people who only pay the minimum (and dont have a 0% promotion) are more likely to be struggling and more likely to default.
Also one thing you need to remember is that lenders looking at someones credit report don't know what the minimum payment is for each card (they can't see who the credit providers are). So considering that one of my cards has a minimum payment that is 2.25 times more than another one they can't even estimate if someone is paying just above the minimum based on past payments. So the minimum payment marker plays an important part.0 -
@Sally sounds a good idea. You have the funds, don't need more credit and paying just above will avoid the marker.0
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