Credit information companies assign a credit score to borrowers. The credit score is a three-digit number between 300 and 900 that indicates a borrower’s repayment capacity and creditworthiness.
TransUnion CIBIL is one of the most preferred credit information companies in India, and the credit rating or score it assigns to borrowers is known as the CIBIL score. A good CIBIL score range is anything between 750 and 900. Borrowers whose credit score lies in this range can avail of Home Loans at low interest rates and enjoy other beneficial loan terms, such as long repayment tenures and higher loan sanctions.
Credit information agencies decide a borrower’s credit score based on the information provided to them by lenders and financial institutions. If you are using a credit card, your credit card company will send information regarding your repayment habits to credit information agencies.
If you are someone who always pays EMIs on time and clears more than the minimum amount due, your credit score will automatically be in the good CIBIL score range. However, if you are someone who pays only the minimum amount due, you will have a low CIBIL score. In this article, we discuss how paying the minimum amount due affects your CIBIL score.
What is the Minimum Amount Due on a Credit Card?
The minimum amount due on a credit card is the smallest payment a cardholder must make by the due date to keep the account in good standing and avoid late fees. In India, this amount is typically calculated as a percentage of the total outstanding balance.
It is important to note that while paying the minimum amount due prevents late fees and keeps the account active, the remaining unpaid balance will accrue interest. Over time, this can lead to a significant increase in the total amount owed, as interest charges accumulate on the outstanding balance. Therefore, it is advisable to pay more than the minimum amount due whenever possible to reduce the principal balance faster and minimise interest charges.
Impact of Minimum Credit Card Payments on Your Credit Score
Credit information agencies assign credit scores to borrowers based on several different factors, and one of these factors is the credit utilisation ratio. The credit utilisation ratio is the percentage of credit being used from the total credit available to the borrower. This ratio is important as it helps a lender understand how dependent you are on credit. Here’s how credit utilisation affects your credit score:
- Borrowers who have a high credit utilisation ratio are borrowers who are highly dependent on credit. Such borrowers are considered risky clients by lenders and, therefore, lenders may not approve loan applications from such borrowers. Borrowers who have a low credit utilisation ratio, on the other hand, may receive quick approval on their loan applications.
- When a borrower pays the minimum amount due on their credit cards consistently, their credit score is not affected. However, when a borrower pays the minimum amount due for a prolonged period and then misses a credit card payment, their credit utilisation ratio increases. The same happens when a borrower keeps paying the minimum amount due on their credit card and using their credit card to take care of various expenses. When a borrower’s credit utilisation ratio increases, their credit score goes down.
Therefore, borrowers are advised to use their credit cards cautiously and try to clear the entire amount due on their credit cards each month and not just the minimum amount due. Borrowers are also advised not to make big purchases on their credit cards if they are unable to clear the entire amount due before the next billing cycle.
Read Also: Know What CIBIL Score is Considered Good for a Home Loan
How to Improve Your Credit Score?
If you want to avail of a favourable loan deal, make sure you have a good CIBIL score that is anything above 750. If your credit report shows that you do not have the required CIBIL score, here’s what you can do to improve your credit rating and your chances of loan approval:
- To start with, maintain a clear repayment record by paying all your credit card bills and loan EMIs on time. Your credit repayment history makes up 35% of your CIBIL score, and therefore, it is necessary to maintain a clean repayment track.
- Get in the habit of clearing the entire amount due on all your credit cards and not just the minimum amount due. If you think you will not be able to clear the entire amount due, postpone the expense.
- Apply for credit only when you need it. Too many credit card and loan applications lead to a borrower having too many hard enquiries, which, in turn, leads to borrowers having a low CIBIL score. So, refrain from applying for too many loans and credit cards in general.
- Lastly, check your credit report for errors from time to time. Sometimes, incorrect information may get passed to the credit information agencies, which can lead to borrowers having a low CIBIL score. Borrowers should check their CIBIL score from time to time and make sure there are no errors in their credit reports.
When it comes to loans of any type, the importance of the CIBIL score cannot be undermined. If you are planning to apply for a loan of any type, make sure you have a good CIBIL score, that is, anything above 750. Having such a credit score will not only help you get quick approval but also avail of a loan on highly lucrative loan terms and conditions.
Conclusion
A good CIBIL score plays a key role in securing loans on favourable terms. While paying the minimum amount due on a credit card helps avoid late fees, it can lead to increased credit utilisation, higher interest costs, and a declining credit score over time. Borrowers should aim to clear their total outstanding balance each month and use credit responsibly to maintain financial health.
Regularly checking credit reports for errors and maintaining a disciplined repayment history can significantly improve creditworthiness, ensuring easier access to loans with better interest rates and repayment options.
Frequently Asked Questions
The minimum amount due is the smallest payment a cardholder must make by the due date to keep the account in good standing and avoid late fees. It is usually a percentage of the total outstanding balance.
Consistently paying only the minimum amount due does not immediately affect the credit score but increases credit utilisation over time. If a borrower continues to rely on minimum payments and then misses a payment, their credit utilisation ratio rises, leading to a lower credit score.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Trending Articles

[N][T][T][N][T]
FSI vs. FAR: Understanding the Difference and Why It Matters2025-07-11 | 2 min

[N][T][T][N][T]
What is FSI and Why It Matters When Buying Property in India2025-07-11 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Bhu Bharati Telangana: Your Guide to Seamless Land Record Management2025-07-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Exploring the Impact of Credit Applications on Your CIBIL Score2025-07-08 | 5 min

[N][T][T][N][T]
Understanding the ECN Number in Your CIBIL Report2025-07-08 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
What Is Refinancing a Mortgage and How Does It Work for Property Owners?2025-06-17 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding FMB Sketch Online in Tamil Nadu: A Comprehensive Guide2025-04-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
CIBIL Score Rules – What Every Home‐Loan Applicant Should Know2025-07-08 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding eNACH Mandates: Meaning, Benefits, and How it Works2025-04-03 | 3 min

[N][T][T][N][T]
Mutation of Property: Meaning, Process, and Importance2025-03-20 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Stamp Duty and Property Registration Charges in Kerala: A Comprehensive Guide2025-04-11 | 2 min

home+loan Home Loan
[N][T][T][N][T]
MCGM Property Tax Mumbai: Online Payment, Calculation, and Exemptions Explained2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Credit Scores and Loan Against Property – What Borrowers Should Know2025-07-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
What is Patta Chitta and How to Apply for it Online?2025-04-01 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Viewing Jharkhand Land Records Online via JharBhoomi Portal2025-04-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Commencement Certificate: Meaning, Role, Requirement and Importance2025-03-06 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Kaveri Online Services Portal for Property Registration in Karnataka2025-04-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
BanglarBhumi West Bengal Land Records2025-03-04 | 3 min

[N][T][T][N][T]
Removing Credit Enquiries from CIBIL – What You Should Know2025-07-04 | 6 min

[N][T][T][N][T]
4 Steps to Avoid Identity Theft and Credit Fraud2025-07-03 | 4 min

[N][T][T][N][T]
What is a Good CIBIL Score Range and Why Does It Matter?2025-07-03 | 7 min

home+loan Home Loan
[N][T][T][N][T]
How a ‘Settled’ Status Can Affect Your CIBIL Score and Your Home Loan Chances2025-07-03 | 6 min

[N][T][T][N][T]
Understanding the Concept of Freehold Property in India2025-07-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Knowing When It's Time to Upgrade Your Home2025-07-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
House Rent Allowance Under Section 10(13A) of the Income Tax Act2025-03-05 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding GWMC Property Tax: Payment Methods, Calculation, and Benefits2025-03-13 | 3 min

[N][T][T][N][T]
How Home Loan Rates Are Determined – What You Should Know2025-06-26 | 5 min

[N][T][T][N][T]
Key Benefits of Availing of a Home Loan2025-06-26 | 4 min

[N][T][T][N][T]
How to Use a Prepayment Calculator Effectively?2025-06-26 | 6 min

[N][T][T][N][T]
What is Fractional Homeownership?2025-06-25 | 5 min

[N][T][T][N][T]
3 Tips to Lower the Interest Rate on a Home Loan2025-06-25 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenure that Suits Your Budget2023-06-29 | 5 min

[N][T][T][N][T]
Property Card in Mumbai: How to Apply and Check the Status2025-06-23 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How Can Prepayment of Your Home Loan EMI Help in the Long Run?2025-06-24 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding What Affects Home Loan Interest Rates2025-06-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Paid Off Your Home Loan? Know What to Do Next2025-06-10 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Understanding How Home Loan Interest Rates Are Determined2025-05-12 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Guntha to Acre Conversion – A Simple Guide to Land Measurement2025-06-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Access Your Login Details in Bajaj Customer Portal?2024-02-02 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Factors to Consider Before Opting for Home Loan Balance Transfer2024-06-21 | 5 min

cibil Cibil
[N][T][T][N][T]
Tips to Maintain Your Business CIBIL Score Above 7002024-02-02 | 5 min

cibil Cibil
[N][T][T][N][T]
Different Types of Credit Scoring Models You Must Know2024-03-14 | 5 min

[N][T][T][N][T]
Circle Rate vs. Market Rate – Understanding the Difference2025-06-17 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Top 5 Home Loan Calculators to Simplify Your Home Financing Journey2025-06-17 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Need Funds After Taking a Home Loan? Here's What You Can Do2025-06-16 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Upgrading to a Bigger Home? Here is How to Plan Your Finances Right2025-06-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Joint Application in Home Loan – Pros, Cons, and Key Considerations2025-06-16 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Smart Ways to Understand and Use a Home Loan EMI Calculator2025-06-09 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How MSME Loans Can Help Small Enterprises to Scale and Thrive2025-06-10 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Basics Made Simple: Understanding Principal and Interest2025-06-10 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Property vs. Personal Loan: Which Should You Choose?2025-06-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Change Your Home Loan e-Mandate on the BHFL Customer Portal2025-03-21 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Smart Steps for Purchasing Property from an NRI: A Guide2025-05-29 | 3 min

[N][T][T][N][T]
AnyROR Gujarat and the e-Dhara Land Record Systems2025-02-26 | 3 min

home+loan Home Loan
[N][T][T][N][T]
IGR Odisha: A Guide to Online Property Services and Registration2025-03-20 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Domicile Certificate: Meaning, Documents, and How to Apply Online2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
PM Surya Ghar: Muft Bijli Yojana: Empowering Households with Rooftop Solar2025-04-01 | 3 min

[N][T][T][N][T]
IGRS Uttar Pradesh – Making Property Registration Easy2025-06-12 | 5 min

[N][T][T][N][T]
4 Simple Tips to Get a Higher Loan Amount on Your Home Loan2025-06-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Tranche Disbursement – A Homebuyer’s Guide2025-06-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Balance Transfer Explained – Is Multiple Transfer Possible?2025-06-11 | 3 min

[N][T][T][N][T]
Moving to a New Home? Don’t Overlook the Tax Angle2025-06-11 | 3 min

[N][T][T][N][T]
Your Guide to Picking the Right Home Loan Lender2025-06-10 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Balance Transfer: Benefits, Eligibility, and More2024-05-15 | 3 Min

home+loan Home Loan
[N][T][T][N][T]
What Affects the Interest Rate on Your Home Loan2024-03-13 | 5 min

[N][T][T][N][T]
Smart Ways to Fund and Plan Your Summer Home Renovation2025-06-09 | 4 min

[N][T][T][N][T]
How Economic Shifts Affect Home Loan Rates2025-06-09 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loans: Smart Financing with Long-Term Benefits2025-06-09 | 3 min

[N][T][T][N][T]
Benefits of Home Loan Interest Rate Conversion: Explained2025-06-09 | 4 min

[N][T][T][N][T]
Understanding Home Loan Subsidies2025-06-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Is Prepaying Your Home Loan the Right Move?2025-06-06 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Five Important Factors to Keep in Mind When Prepaying Your Home Loan2023-01-17 | 6 min

[N][T][T][N][T]
How Is a Loan Against Property Processed?2024-02-05 | 6 min

tax Tax
[N][T][T][N][T]
How to Avail of Tax Benefits on a Loan Against Property2024-06-13 | 5 Min

tax Tax
[N][T][T][N][T]
8 Different Ways to Avail of Tax Benefits on Home Loans2023-03-03 | 4 min

home+loan Home Loan
[N][T][T][N][T]
ITR Filing for Home Loan – Know the Right Process to File Your Income Tax Returns2024-02-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
10 Factors That Affect Your Home Loan Eligibility2024-05-21 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Understanding CIBIL MSME Rank: What it Means for Your Business Loan Application2025-05-30 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Rising Home Loan Interest Rates: Impact on First-Time Homebuyers2025-06-03 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Know About CTS Number When Buying a Property in Mumbai2025-03-04 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Estimating Your Monthly Outgo on a Rs.1 Crore Home Loan2025-05-30 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How Can You Get a Place of Your Own When Living in a Metro City?2025-05-30 | 3 min

[N][T][T][N][T]
Home Loan ROI Explained: What it Means2025-05-30 | 5 min

[N][T][T][N][T]
What are Tranche Disbursement and Tranche EMI in Home Loans?2025-03-14 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Top Up your Home Loan2025-03-04 | 3 min

[N][T][T][N][T]
7 Smart Ways to Optimise Your Home Loan Interest Repayments2025-04-03 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Processing Time: What to Expect and How to Prepare2025-04-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
5 Great Ways Women Can Benefit from Taking a Housing Loan2024-01-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Tips to Secure Quick Home Loan Approval2025-03-03 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Consider These Factors Before Foreclosing Your Home Loan2024-04-16 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Pre-EMI or Full EMI: Understanding Home Loan Repayment Options2025-01-16 |

home+loan Home Loan
[N][T][T][N][T]
How Much Home Loan Can I Get? A Guide for First-Time Borrowers2025-04-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Self-Employed Individuals2025-03-03 | 2 min

[N][T][T][N][T]
Smart Ways to Pay Off Your Home Loan Faster2025-04-01 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Prepayment: Everything You Need to Know2025-04-07 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Smart Home Loan Planning After 45: Tips and Strategies2025-05-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Need More from Your Home Loan? Here’s How You Can Optimise I2025-05-07 | 3 min

home+loan Home Loan
[N][T][T][N][T]
An Essential Guide to Refinancing a Home Loan2024-04-22 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
Understanding RERA in Real Estate: Meaning, Full Form, and Benefits2025-02-16 | 2 min

home+loan Home Loan
[N][T][T][N][T]
MPIGR Madhya Pradesh: A Guide to Property Registration and SAMPADA Services2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
A Guide to Applying for DTCP Approval for Patta Land Online