Basic credit rating question

sturgeon

I have a number of credit cards, all of which I pay off the monthly balance in full by direct debit when the due date comes around.

I have a Barclaycard too, which I'm currently not using for spending, as I took up an offer for a money transfer-the terms were (from memory) 18 months money transfer for 0%, apart from a 1.9% fee or something. I transferred around £5k to my bank account using this offer, and am currently paying off £300 a month via direct debit-as the intention is in 3-4 months time I can pay off the lot. The minimum payment required is circa £25 monthly.

My question is, does having this £5k balance sitting on the card being chipped away by £300 monthly impact my credit rating negatively?

Even if it does make a minor impact right now (which may flatten out once paid off in full in 3-4 months time), my main concern is if I am applying for another mortgage in say 2 years time, will this old balance which was not paid in full and rather paid in instalments affect me adversely in any way?

My understanding is that there should only be a negative impact to my credit record if I miss a payment, although as mentioned the minimum is £25 monthly and I am paying well above that.

Also, presumably I could actually make the minimum payment, and then pay the full balance just prior to the 18 month 0% window ending-would this also not impact my credit rating?

It just seems odd that I did a large balance transfer, kind of like a loan, and this wouldn't impact my credit file badly. I think that besides a mortgage, taking out any form of loan/balance transfer scares me...probably pointlessly.

Any help appreciated!

[Deleted User]

Making low or minimum payments is fine if the balance is on a promotional rate.

Lenders will take the debt into account though, for any new applications.

sturgeon

Thanks. Regarding your second point, if the balance has been paid off (i.e. I pay this off in 3-4 months time and apply for a mortgage in 12 months time), presumably there is no 'debt' to affect me? Or do they see that there was a big balance being slowly paid off in the recent past, presenting a problem?

[Deleted User]

A paid off debt is very unlikely to cause any concern.

nicholbb

I had double your debt on a 0% card. I paid of a couple off months before applying for a mortgage and that seemed to cause an issue with Santander but none with Halifax.
Having spoken with both advisers neither saw it would be an issue, Halifax even said I didn't need to pay it off, just tick a box saying I had funds to pay (not a chance would I risk the hassle of doing that).