Does Minimum Payment Affect Credit Score?

Credit Card
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Does paying minimum payment on credit card affect credit score?

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If you’re on Google typing, “Does minimum payment affect credit score?” the short answer is no. From my recent experience and a little bit of research on this, I would suggest it’s always better to pay your bill in full without waiting till the last day.

But, if you have a cash shortage, you can pay just the minimum amount and pay the rest when you can afford. Doing this one or two times is not an issue.

The problem starts when this becomes a habit. That’s when you face issues like a high interest rate or unfavourable terms on your next credit accounts.

Over time, this can lead to 3 major consequences:

  1. Your credit score takes a dip.
  2. Your credit utilisation ratio goes up.
  3. You will fall into a debt trap.

So yes, you can pay the minimum due amount during a cash crunch, but you can’t make it a habit.

I can suggest 3 tips if you can’t pay the full outstanding amount:

  1. Try to pay as much as you can.
  2. Contact your lender and explain your situation.
  3. Limit your credit usage for the upcoming months.

These tricks helped me, and I hope that they’ll help you as well.