7

On a bank's website, I read that part payments affect credit score.

Avoid part payments. It doesn’t really help and affects your score.

There are times when amount due on my card is 20k, and I pay in two parts, say (5k, 15k) well before due date.

Why credit score would be affected by this?

18

If you have a bill for $100 due at the end of the month and only pay $80 of it, you will have failed to meet your obligations and this will be another hit on your credit score. On the other hand, if you pay $80 early in the month and $20 late in the month, making the full payment before the due date, that would be an example of you meeting your credit obligations and would reflect positively, the same as making a single $100 payment.

The article isn't talking about making multiple partial payments in a month, it is talking about making single, insufficient, partial payments.

  • 2
    Some loans (maybe mortgages) do not accept partial payments or do not consider them as paying in full even when they add up to the correct total. – stannius Oct 17 '16 at 14:57
  • The concrete, actionable advice would be "if you have two debts, and you can half-pay each, instead fully pay one"? Or "if you cannot fully pay for all debts, pay nothing"? – Yakk Oct 17 '16 at 19:46
  • If you cannot pay the minimum payments on two debts, you'll take less of a hit if you pay the full minimum amount on one. – ChrisInEdmonton Oct 17 '16 at 20:02
4

Avoid part payments. It doesn’t really help and affects your score.

This is a generic statement for any loans and not specific to Credit Card loans. It means that all loans must be paid as per the schedule. For example if your EMI is Rs 7000/- you have to pay Rs 7000/- and part payment does not help.

There are times when amount due on my card is 20k, and I pay in two parts, say (5k, 15k) well before due date.

This is fine and does not affect your credit score as long as you pay before the due date.

0

It is perfectly acceptable to make partial payments as long as your payment is above the minimum payment. One issue with partial payments is some banks will charge interest if you do not make the full payment the first time. Different computer systems are set up to detect payments differently so if you make just the minimum payment, then make a payment later, you may be charged interest even if you pay it in full. This is rare but I've seen some banks that only count the first payment as your payment you made for that period, then they charge interest on the rest until you make another payment.

As for credit score, your information that you obtained is likely misinformation. As long as you make a payment more than the minimum payment, you will have a good score. You want to make as large as a payment as possible in order to reduce your total utilization of credit.. but partial payments are not going to affect the score. I've never had a single partial payment ever affect my score and I do it all the time. What is bad is if you make a partial payment under the minimum due. You should pay the minimum or over to ensure the computer doesn't detect that you didn't even make a minimum payment that month.

protected by Chris W. Rea May 1 '17 at 11:47

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