Does paying more than the min payment, affect my credit rating?

glawster_2

Hi

Had a bit of a nightmare in the last 2 years, lost job through redundancies and subsequently my house (not repossessed but involuntarily sold before it was) as well as a 6 month period of unemployment. I ended up with a lot on credit cards as well as a few missed payment.

My credit rating took a hit and I'm looking to rebuild it. I've got about 4k left on the cards and can afford a couple of hundred a month to repay. Following advice on this site I got a long term 0% deal. However I know that paying only the minimum is not good for my rating. But I can't pay the full balance yet. My current credit rating isn't good (I've checked it is accurate but has previous missed payments, though no defaults or CCJs) and I can only seem to get the 'bad' credit cards.

I now pay the minimum amount on a balance transfer 0% credit card with the rest in a savings account so there is a little extra interest towards paying it off at the end of the 0% next year.

However, is it worth paying a little more than the minimum? I read somewhere that credit card companies report minimum payments. Do they also report specifically that you have paid more than the minimum (even if not the full balance) and if so how does this impact your credit rating? Is it worth paying just a couple of quid more a month than the minimum resulting in getting a better credit rating?

Thanks :money:

bobbydrake50

Yes just pay a small amount extra (most say either minimum, full or specified amount) - supposedly this looks good that you can pay more than the minimum.

lizault

I paid my ASDA(Santander) account last month but less the amount due to go out by Direct Debit. I have now been charged interest of £3.60 because I paid the bulk owing, earlier than the due date and they therefore did not request the DD which left me short by £5 paying off what I owe. In order to avoid charges I arranged the DD. They get you every which way but lose! Surely this can't be right?

bengal-stripe

lizault wrote: »

I paid my ASDA(Santander) account last month but less the amount due to go out by Direct Debit. I have now been charged interest of £3.60 because I paid the bulk owing, earlier than the due date and they therefore did not request the DD which left me short by £5 paying off what I owe.

It says quit clearly on the Santander statement:

Important information if you pay by Direct Debit and make additional payments to your account:

If you make an additional payment and this is credited to your account more than 5 days before payment due date, the amount collected by Direct Debit will be adjusted to take account of this payment.

The original Direct Debit amount will still be taken if an additional payment is credited to your account less than 5 days before the payment due date.

Really, how could they have made it any clearer? It pays to read! - But as usual, it’s the bank’s fault.

lizault wrote: »

They get you every which way but lose! Surely this can't be right?

Naf

Your credit file shows EXACTLY how much was paid each month, and the outstanding balance. It doesn't specify whether the amount you paid was more than the minimum or not, only if it was less. But even a slightly moronic person could work out if what you paid was more than the minimum.

My advice would be to pick the card with the shortest time left on 0% and start paying ALL of your money (except your small amount of savings) straight to it each month, then use this card to pay for the other cards, your bills and groceries. This way you will show much higher payments on the card than otherwise, plus you are more likely to leave a little extra on it by the end of the month, paying it off sooner. You will also pay much less interest once the 0% runs out.

chattychappy

Er... the credit file (at least on Experian and for most of my cards) DOES show if the payment received was just the minimum.

The following are flagged:

Whether a cash advance was taken
Whether a promotion is in force
Whether a payment received was just the minimum.

Who knows how much weighting is applied to these factors. To me, MIN + PROMOTION isn't serious, but MIN + no promotion could be a sign of distress.

thecableguy12

Naf wrote: »

Your credit file shows EXACTLY how much was paid each month, and the outstanding balance. It doesn't specify whether the amount you paid was more than the minimum or not, only if it was less. But even a slightly moronic person could work out if what you paid was more than the minimum.

My advice would be to pick the card with the shortest time left on 0% and start paying ALL of your money (except your small amount of savings) straight to it each month, then use this card to pay for the other cards, your bills and groceries. This way you will show much higher payments on the card than otherwise, plus you are more likely to leave a little extra on it by the end of the month, paying it off sooner. You will also pay much less interest once the 0% runs out.

sorry if you check your file it does state minimum payment recieved yes/no, if marked as a yes other creditors think you may be struggling, its always best to pay more, if im low on capital i always just pay a £1 extra, dont know where you got your information from buts it wrong as prev stated