# Performing credit - full and final settlement



## GirlFriday (5 Mar 2012)

Hi

I have a credit card with MBNA. I am in a position to pay half the ammount owed. It's a performing loan - i.e. I have always made minimum payments. I was wondering if it's possible to make a full and final settlement of a performing loan without affecting my credit rating? I had heard that this was possible. I am under financial pressure but I'd hate to have a damaged credit record. On the other hand, as someone has pointed out to me recently, half the country now has a damaged credit rating so in a few years time, nothing will be thought of it. Can I have your opinions please?


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## Janet (5 Mar 2012)

Do you mean you have some kind of special agreement to use your credit card as a performing loan (had to go and look that up, never heard of it before and still amn't sure how it relates to your credit card)?  If you just mean that you always pay at least the minimum and keep using your card then, well, in my opinion you would be very well-advised to do everything you can to pay off as much of the balance as you can.  

Paying off half of the balance will not adversely affect your credit rating.  Nor would paying off the full balance, which is what you really should be aiming for.  



> On the other hand, as someone has pointed out to me recently, half the country now has a damaged credit rating so in a few years time, nothing will be thought of it.


Don't worry about the rest of the country, worry about your own situation.  Lots of things can happen in the next few years.  It's a bit like that thing your mammy used to say about shoving your hand in the fire just because someone else did.


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## Bronte (6 Mar 2012)

GirlFriday said:


> On the other hand, as someone has pointed out to me recently, half the country now has a damaged credit rating so in a few years time, nothing will be thought of it. Can I have your opinions please?


 
Well you asked opinions and that kind of thinking is why so many people went wrong during the boom, because everyone else was.

There is a problem if you are only making minimum repayments as this never repays the loan and is normally set at such a rate that all you're paying is interest but never actually tackling the debt.  ]

As you're such a good payer, just what credit card companies love, and because you've never missed a payment it is highly unlikely the credit card company will cut you a deal.  Those deals are for those who have not the means to repay.  

I recommend you pay off as much of the loan as you can and pay more than the minimum payments and if you feel you will be tempted to add to the debt on the card, then cut it up.


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