Paying the minimum for your credit card lowers your rating?

Question

I really need to know...

I've only paid minimums, I'm afraid my credit score might be so c**p that I won't be able to buy a house some day. :(

And how can I get it back up?

Answer 1

are you single with no kids? then who cares...debt is only a number anyway...LIVE IT UP!!!

Answer 2

You risk being labeled as a "slow pay" cardholder if you continue making only the minimum payment month after month. Although you may uphold your end of the cardholder agreement with your on-time minimum payments, credit card issuers may generally raise your rates at any time without reason.

Making only the minimum for 6 consecutive months or more could cause an interest rate increase. Sending a few extra dollars can help you avoid it.

Answer 3

If you are only paying minimum, I am afraid but you are really heading for trouble. The minimum amount for most cards is designed in such a way that interest part is more and principal less, so you keep paying and paying and the debt keeps rising.

You need to do better than that, and pay off more than that to really build a solid score. Try getting a loan from a credit union at a lower interest rate and pay off your card in full. Because you have a loan, you will still be building credit when you are repaying and you will be better off as compared to the credit card interest rate.  

Answer 4

making minimum payment doesn't lower your scores. not paying minimum, defaulting and paying late makes your credit look bad. It is always good to make the payment in full every month but if you can't afford it, make sure to pay the minimum balance ALWAYS. Minimum payment ensures that your payment history which is 35% of your FICO score is reflected positively.

Your scores are probably low right now because your debt utilization (debt to credit ratio) is over 50% right now which makes for 30% of your score. Don't worry about it  and pay off the balance immediately since debt utilization can vary over time and you are reducing your utilization every month by paying $100 a month. If you keep your debt utilization under 10% you get the most points for that. Once your utilization is low, it will be reported and your scores will be back up immediately. For the long term, as long as you are not late or defaulting, you should be fine and work on getting that card paid off. Imagine how much interest you are paying just for keeping a balance!!!!

As long as you have been making the payments on due date and before, your credit isn't c**p and won't be. Once your debt to credit ratio is under 10%, you will get maximum points for that too which will happen as soon as 6 months assuming you will be paying what you pay right now.

Never and I mean never make a late payment or default on a card. That will haunt you for 7 years.

Answer 5

Paying the minimum won't necessarily damage your credit score.  However you never want to have more than 1/3 of your available credit used.  so if you have a $3000 credit line try to keep your balance at $1000 or less.  It does hurt your credit score if you are maxed out on your credit.  Good Luck.

Answer 6

Yes it does, it signals to lenders your are living over your limit If you cannot pay charge bill in full at least double or triple the minimum payment,.