topic What affect will balance transfers have on Score in Understanding FICO® Scoring

What affect will balance transfers have on Score

Anonymous — Tue, 24 Mar 2009 12:07:01 GMT

We are looking to refinance our home loan and are trying to get our credit score up. We are currently at 689 equifax. We just took out a credit union unsecured personal loan to pay off 7500 of credit card debt. Now the credit card company is offering a 5% intrest for 2 years.

We would like to move 5000 of retail card debt (ie Walmart etc) on the card but don't know what effect it will have on score. The balances will stay the same but our interest will be lowered.

Can anybody help us out here.

Thanks

Re: What affect will balance transfers have on Score

haulingthescoreup — Tue, 24 Mar 2009 22:26:58 GMT

Hi, welcome to the forums!

If you don't increase the amount of total credit available (on CC's, this does not include the loan), and if you don't pay down balances on whichever account, there will be no affect on your scores. Presumably your total CL will go up some with the new card, so that might help, but it depends on what your current total util is, and what it would change to. Util has to change into a new range to result in a score change; in other words, dropping 57% to 55% probably won't do anything, but dropping 51% to 49% might.

Interest rates are not reported on credit reports, and therefore there is no way that they can be factored into your scores.

If moving some of your CC debt onto the new card helps make it easier to pay down your total debt, then that can make sense, but do check out what the balance transfer fee is, whether it is capped, and what will happen if you don't pay off the BT'd amount in the promo period.

Re: What affect will balance transfers have on Score

marty56 — Wed, 25 Mar 2009 00:36:40 GMT

Also, if you do a BT, dont use the card to buy anything else since the payment still goes to the lowest APR. I think the law may change next year but I wouldn't count on being grandfathered in.

Message Edited by marty56 on 03-24-2009 05:36 PM