how to make more than the minimum payment

kernowbeetle

Hi,


I have credit card debt which I am only able to make the minimum payment on at the moment, however I understand that this is looked upon badly on credit reports now as lenders can see only the minimum payment is being made?

If so, if I upped my monthly payment by say even just £1 would it then remove the 'minimum payment' aspect from my credit file?


Thanks

[Deleted User]

Yes. .

Stevie_Palimo

I have a number of credit cards and allow the min payment via dd then I have then set up via my online banking and pay the balance in full around the same time as the dd is due or prior depending upon my requirements on the card in question.

All you do is set up in online banking with there account details and normally your full credit card number as a reference, Failing this go to the bank and pay over the counter with any additional money you would like to clear it down with.

Anthorn

kernowbeetle wrote: »

Hi,


I have credit card debt which I am only able to make the minimum payment on at the moment, however I understand that this is looked upon badly on credit reports now as lenders can see only the minimum payment is being made?

If so, if I upped my monthly payment by say even just £1 would it then remove the 'minimum payment' aspect from my credit file?


Thanks

Not necessarily: It depends on what a lender viewing your credit history is looking for. If they are looking for a customer who only pays the minimum payment on time and keeps a balance so the lender can make a fat profit, you're in with a chance. What remains then is your available credit and your credit utilisation.

However some lenders want you to use your credit card for everyday purchases and clearing that balance every statement while at the same time using your credit card for larger purchases paying for those in installments. i.e. Lloyds Bank. In short use it for everything and a reducing balance rules supreme.

Read between the lines of the blurb especially the blurb on your statement.

chattychappy

The minimum payment marker could indicate distress so it is worth avoiding. It might be that it is disregarded if, for example, the actual minimums are very small, you have ample unused available credit, or there is a promo running.

With Tesco I often had a small balance - so the total balance was also the minimum payment. It was annoying I was "saddled" with a minimum payment marker when it would have been a breach of T+Cs to have paid more!

I don't think a minimum marker would ever be regarded as positive. I believe the CRAs are only used to assess default risk and for fraud prevention as well as to demonstrate responsible lending.

Anthorn

chattychappy wrote: »

The minimum payment marker could indicate distress so it is worth avoiding. It might be that it is disregarded if, for example, the actual minimums are very small, you have ample unused available credit, or there is a promo running.

With Tesco I often had a small balance - so the total balance was also the minimum payment. It was annoying I was "saddled" with a minimum payment marker when it would have been a breach of T+Cs to have paid more!

I don't think a minimum marker would ever be regarded as positive. I believe the CRAs are only used to assess default risk and for fraud prevention as well as to demonstrate responsible lending.

Why is paying the minimum payment on time every month keeping to the contract a negative? It just doesn't make sense that should be a negative and indicate (financial) stress. Not paying or paying late would indicate financial stress.

Unless you have proof to support your claim it has to be viewed as unsupported pedantry!

Sea_Shell

Does the negative marker still apply if you're on a 0% deal, and stoozing???

[Deleted User]

No. There is also a promo flag and lenders won't be concerned by min payments in that case.

Anthorn

Delving into this very strange negative marker which I have never heard of before: If I pay £1 more than the minimum payment then I won't get the negative marker because ... er ... I've paid more than the minimum payment?

YorkshireBoy

Anthorn wrote: »

Why is paying the minimum payment on time every month keeping to the contract a negative? It just doesn't make sense that should be a negative and indicate (financial) stress. Not paying or paying late would indicate financial stress.

Unless you have proof to support your claim it has to be viewed as unsupported pedantry!

All the proof you need is freely available from industry documents, parliamentary papers, steering group publications, etc, all of which can be accessed quite easily. But think about it...if it wasn't important for the lending industry and closed user groups to know if you were making only minimum payments then why would said lenders and closed user groups have spent (considerable?) money changing the reporting system?

The main (only?) reasons people pay just the minimum can be summarised as follows:

1. They're up to their neck in debt!

2. They're just lazy, and not thinking of the financial consequences to themselves.

3. They're deliberately paying interest in the misguided belief that their lender will view them as a better customer and not increase their interest rate and/or not lower their limit...from reading a few of your recent posts you fall into this category!

4. They're on a 0% deal, as indicated by the aforementioned marker.

In my view, they're really concerned with (1), especially if the debt is large, but (4) will allay their fears somewhat.

Anthorn

YorkshireBoy wrote: »

All the proof you need is freely available from industry documents, parliamentary papers, steering group publications, etc, all of which can be accessed quite easily. But think about it...if it wasn't important for the lending industry and closed user groups to know if you were making only minimum payments then why would said lenders and closed user groups have spent (considerable?) money changing the reporting system?

The main (only?) reasons people pay just the minimum can be summarised as follows:

1. They're up to their neck in debt!

2. They're just lazy, and not thinking of the financial consequences to themselves.

3. They're deliberately paying interest in the misguided belief that their lender will view them as a better customer and not increase their interest rate and/or not lower their limit...from reading a few of your recent posts you fall into this category!

4. They're on a 0% deal, as indicated by the aforementioned marker.

In my view, they're really concerned with (1), especially if the debt is large, but (4) will allay their fears somewhat.

If all that is true why do CC companies and banks allow a DD which pays only the minimum payment. Are they just sucking us in so that we unwittingly have bad credit?

There is also my previous question so far unanswered, "Delving into this very strange negative marker which I have never heard of before: If I pay £1 more than the minimum payment then I won't get the negative marker because ... er ... I've paid more than the minimum payment?"