People Who Pay More than the Minimum Seen as Better Credit Risk

Marcie Geffner • December 19, 2014

Paying more than the minimum on your credit cards can help you reduce your debt. But that’s not the only reason to do it.

Research from TransUnion, a global credit data collection and analysis company headquartered in Chicago, suggests people who pay more than the minimum might also be a better credit risk, making them more attractive customers to financial services companies.

Why it pays to go beyond the minimum payments

Being perceived as a better credit risk matters because it means you’re more likely to receive advantageous offers of credit with high limits, low rates and favorable terms.

The TransUnion study found consumers who could pay more than the minimum on their credit card were significantly more likely to make their credit card, auto loan or mortgage payment on time.

Consumers who paid only the minimum, or not much more, were more likely to pay late.

How to be a better credit risk

The findings confirmed people who pay off their credit card each month are a better credit risk than those who “revolve,” or carry a balance, and that not all “revolvers” are equal.

“Those who pay more than the minimum on their credit cards, even if they don’t pay off the full balance, present less risk across product types,” said Ezra Becker, a vice president of research and consulting at TransUnion and study co-author.

The findings are good news for consumers, Becker added, because even if they can’t pay the full balance, lenders might “view them in a more positive light depending on the amount they do pay.”

The study evaluated a random sample of credit records from the TransUnion database. Selected records included 22 million people who had an auto loan, 17 million who had a credit card and 12 million who had a mortgage.

The company said it developed several new measurements, or “metrics,” as part of the study and that these metrics could help lenders better evaluate consumer credit risk.

Ready to be a responsible borrower? Check out our hand-picked best credit cards of 2014.

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Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

About the Author

Marcie Geffner

Marcie Geffner is an award-winning freelance reporter, book editor and blogger whose work has been published by Yahoo! Finance, Fox Business,, AOL Real Estate,, Inman News and dozens of major U.S. newspapers. She holds a bachelor's degree in English from UCLA and MBA from Pepperdine University and has completed advanced novel-writing courses at the UCLA Extension Writers' Program. She is a second-generation and lifelong resident of Los Angeles. Connect with her on Google+.