Lauren Smith, WalletHub Staff Writer
Yes, paying more than the minimum will help your credit score because you will pay off your total credit card balance sooner and lower your credit utilization. It is very expensive and can take a very long time to pay your entire balance if you only make the minimum payment. New interest charges accumulate daily, and minimum payments only cover a very small percentage of the principal.
Your credit utilization has a significant impact on your credit score. Credit utilization measures how much of your credit limits you are currently using. Maintaining a utilization ratio under 30% will protect your credit. However, an ideal ratio is 1-9%. Reducing your credit card debt will improve your credit utilization ratio and therefore increase your score.
Paying off credit cards and loans faster also reduces your overall debt-to-income ratio, which improves your credit score.
You can use WalletHub’s free credit card payoff calculator to determine how long it will take you to get rid of your debt. Plus, you can get personalized credit-improvement tips for free on WalletHub.
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