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Detailed explanation-1: -However, although payment of just the minimum amount due in itself does not impact your credit score, if you get into a habit of paying only the minimum amount due, over a long period of time, your credit utilisation increases, which in turn does have a negative impact on your credit score.

Detailed explanation-2: -Typically, the minimum amount due is calculated as 5% of your outstanding balance. Paying the only minimum amount due every month on your credit card can severely affect your credit score.

Detailed explanation-3: -While paying off your debts often helps improve your credit scores, this isn’t always the case. It’s possible that you could see your credit scores drop after fulfilling your payment obligations on a loan or credit card debt. However, that doesn’t mean you should ignore what you owe.

Detailed explanation-4: -If you pay only the minimum amount due for a long time, you will have to pay high interest charges on the outstanding amount. You won’t get any interest-free credit period. Along with this, your credit limit will also be reduced to the amount that you haven’t repaid.

Detailed explanation-5: -Paying off your credit card balance every month may not improve your credit score alone, but it’s one factor that can help you improve your score. There are several factors that companies use to calculate your credit score, including comparing how much credit you’re using to how much credit you have available.