Re: How will this balance transfer affect my score... - myFICO® Forums

Anonymous · ‎08-31-2017

Hi folks -

I recently opened a 0% APR card with Citi, and my plan was to transfer my current Chase Sapphire balance over to that card to pay down the balance without having to incur interest. However, I'd be using about 33% of that card's total utilization vs about 20% for the Sapphire. My overall utilization is about 5%, and my current score is 848 per Citi/823 per BofA. If I go through wtih the plan, how will my credit score be affected? I suppose in the long run the plan is sound, but just cuious about the short term.

Anonymous · ‎08-31-2017

The evidence seems to be that, if your have a low total utilization, then your individual utilization could easily go up to 48.9% with zero scoring impact. (Some people believe that you might experience a tiny ding at an individual utilization of 30%, but lots of people report zero impact in this situation.)

But of course, even if there was a ding of 3-4 points, that would mean nothing in practical terms for you since your FICO 8 Classic is 828 and your FICO 8 BE is 848.

If I were you I would make sure I am paying as many of my cards in full (PIF) as possible. As I understand you, you should be able to PIF on all cards except the one card you are gradually going to pay down.

Establishing PIF behavior on as many cards as you can will be good for the future. It's called being a Transactor. That behavior will be able to be detected by creditors of the future (even some look for it now) and it will help you be perceived as safe.

Anonymous · ‎08-31-2017

Great, thanks so much for the feedback! To clarify, the Sapphire is the only card with a balance.

Anonymous · ‎08-31-2017

@Anonymous wrote:
Hi folks -

I recently opened a 0% APR card with Citi, and my plan was to transfer my current Chase Sapphire balance over to that card to pay down the balance without having to incur interest. However, I'd be using about 33% of that card's total utilization vs about 20% for the Sapphire. My overall utilization is about 5%, and my current score is 848 per Citi/823 per BofA. If I go through wtih the plan, how will my credit score be affected? I suppose in the long run the plan is sound, but just cuious about the short term.

If you are at a point where your score isn't really a factor anymore, whether its high enough to not matter, or you simply aren't planning on app'ing for anything, then to me paying less interest trumps any possible utilization hit

(edited becuase my speeling sukcs)

Appleman · ‎08-31-2017

My educated guess is that you will lose points by going over 30% utilization on a card.

However, you will be saving money and you have room with your score to see a decrease.

The questions is, which will result in the higher score, 1) Having 1 card report 33% utilization or 2) 1 card report 29% utilization and another card report a few percent utilization?

For FICO maximazation you want one card report 1-2% (less than 9%).

Please let us know how the score works out after you decide what course to take.

HeavenOhio · ‎08-31-2017

There could also be a temporary ding before the BT dust settles. It's possible that both cards may report the transferred balance for a while. And because your Sapphire card is the only one with a a balance, it's also possible that all cards might report zero for a while. As others have mentioned, with your scores, there's plenty of cushion. And as long as you understand what's going on, you'll know that there's no need to freak out as everything will be cleaned up in a month.

SouthJamaica · ‎08-31-2017

@Anonymous wrote:
Hi folks -

I recently opened a 0% APR card with Citi, and my plan was to transfer my current Chase Sapphire balance over to that card to pay down the balance without having to incur interest. However, I'd be using about 33% of that card's total utilization vs about 20% for the Sapphire. My overall utilization is about 5%, and my current score is 848 per Citi/823 per BofA. If I go through wtih the plan, how will my credit score be affected? I suppose in the long run the plan is sound, but just cuious about the short term.

If you follow that plan you'll lose some points short term. I'm guessing 10 points or so but who knows.

You would lose less points if the Citi card balance which reports is 29%, rather than 33%.