Paying just above minimum payment on credit card

thewinkshow

Can toy set up a direct debit o pay £1 more than minimum payment ?

Does this look better than having the minimum payment sign on your credit report?

CLAPTON

I know of no companies that provide this facility
however you can make two payments, one the normal DD and a extra payment
read carefully the T&Cs and see how your particular CC deals with multiple payments

Superheavy

I'm not sure if it's part of new regulations, or if it's just something that's recently been introduced at HSBC, but you can set up a DD for a fixed amount, so if you have a balance that is decreasing, and you're not adding to the balance then that might be an option.

Alternatively, set up the DD for the minimum amount, and a standing order from your bank account for the £1.

Not sure if it would affect credit report though.

bit_2

set up a direct debit and pay £10 a mouth before, and it did help my credit report to look better.

Dave_the_Ginger_Cat

Paying extra above the minimum payment is not likely to improve your credit rating. Lenders can't tell this level of detail from the data that is supplied to them. At the bureaux, paying a min payment will show as being up to date, as will paying slighltly more.

Where it could help is with your own lender. It will show you as having a reducing balance over time, paying mroe than the minimum payment, and could improve their view of you.

Aside from this, it is a good idea to pay more than the minimum payment where you can - even small amounts can help reduce the time you'll be paying by a decent chunk of time.

izools

Dave_the_Ginger_Cat wrote: »

Paying extra above the minimum payment is not likely to improve your credit rating. Lenders can't tell this level of detail from the data that is supplied to them. At the bureaux, paying a min payment will show as being up to date, as will paying slighltly more.

Where it could help is with your own lender. It will show you as having a reducing balance over time, paying mroe than the minimum payment, and could improve their view of you.

Aside from this, it is a good idea to pay more than the minimum payment where you can - even small amounts can help reduce the time you'll be paying by a decent chunk of time.

Credit card companies report a flag against each months payment now that says whether or not the debtor has paid only the minimum, or more than the minimum.

So they can tell. And it does have an effect. We refer to it sometimes as the "struggling to pay" flag.

stclair

izools wrote: »

Credit card companies report a flag against each months payment now that says whether or not the debtor has paid only the minimum, or more than the minimum.

So they can tell. And it does have an effect. We refer to it sometimes as the "struggling to pay" flag.

I totally agree with the above comment

A lender is able to determind whether you have paid the min payment or not.

YorkshireBoy

Dave_the_Ginger_Cat wrote: »

Lenders can't tell this level of detail from the data that is supplied to them.

Things may have changed since you last viewed your credit report? See here...

http://www.experian.co.uk/downloads/consumer/YCREJul08.pdf (see pages 16-17)

YorkshireBoy

izools wrote: »

We refer to it sometimes as the "struggling to pay" flag.

Unless accompanied by a 'Y' in the promotional rate indicator column?

izools

YorkshireBoy wrote: »

Unless accompanied by a 'Y' in the promotional rate indicator column?

AKA the "loss-leading customer" flag

You're right though, that then may allay the creditors fears that the customer is suffering debt stress but then again it has been mentioned that lenders may taylor their scoring models just as much towards profitable customers as they to towards low risk customers, so depending on the lender, this may too have a detrimental effect especially if the balance drops to £0 the same month that the promotional rate indicator drops off.

thenudeone

I have been stoozing for ages.
Only paying the minimum payment is definitely a factor; it was mentioned in a conversation I had with a lender who had reduced my limits.
Now, I have set up standing orders to pay £5 to each card issuer a few days before each statement. This avoids the possibility that they may reduce the direct debit when I make an extra payment early in the statement period