Pay off full balance or pay minimum amount?

loren1234

Hi, I'm looking for some advice please.
I am looking to get a morgage at the end of the year as a first time buyer with my husband.
Therefore I want the best possible credit score.
I have one credit card (I don't owe a lot on it) which I pay the minimum amount each month. Should I continue to pay the minimum amount and build up my score by showing I can keep up with payments, or pay off the full amount?
Any advice would be greatly appreciated.
Thanks.

molerat

If you only pay the minimum it will be flagged as such and will show up as struggling. Paying over the min is essential for a good credit record.

izools

Absolutely. If you're only doing this as a credit building exercise then spend little and repay in full. Certainly the best way to demonstrate responsibility with credit

Mortgage lenders are looking for proof of stability and responsibility when they credit check you, not profitability so much.

So whilst paying less than the full amount might lead some credit card companies to believe you may be a more profitable customer, the same is not true of mortgage lenders.

birkee

Paying off the minimum on a credit card, does not bode well for your future.
In effect, you throw money away in interest, which means you have poor judgement about financial priorities. e.g. You might miss a mortgage payment because you want a holiday instead.