Does a Balance Transfer Hurt Your Credit Score?
This guide breaks down the small hits, the offsetting benefit, and the mistakes that turn a helpful move into a harmful one.
The small, temporary hits
If your balance transfer involves opening a new card, that application creates a hard inquiry and a new account, both of which cause a minor, temporary dip, much like any new card. Transferring within cards you already have avoids even that.
The offsetting benefit
Working in your favor, a new transfer card adds to your total available credit, which lowers your overall utilization if your balances stay the same. Moving debt off a nearly maxed card also improves that card per-card utilization. Because utilization is a big scoring factor, a transfer often helps your score on net, even with the small inquiry cost.
How to keep it a net positive
The pitfalls are behavioral. Maxing out the new card gives it very high per-card utilization, which can hurt, and running the old cards back up recreates the debt you just moved, doubling your balances. Keep the old cards open and paid down, avoid maxing the transfer card, and pay off the balance during the intro period. Done that way, a balance transfer is usually neutral to positive for your credit.
- Opening a transfer card adds a hard inquiry and a new account.
- Those cause a small, temporary dip.
- The new limit can lower your overall utilization.
- Moving debt off old cards lowers their per-card utilization.
- Maxing the new card or reusing the old ones undoes the benefit.
Frequently asked questions
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