Potential assessment of a higher risk (i.e., a "red flag") due to a balance transfer transaction would likely depend upon how the transaction is actually completed.
If the transaction is actually a balance transfer, meaning the increased debt on the BT card is used to pay down other cards, then the overall debt balance and % util remains essentially the same (with overall balance increasing only by the amount of the 3% BT fee).
Thus, overall assessment of risk of repayment is essentially the same, with the deck chairs being shifted, but still the same in number.
Many BT transactions are done by the creditor asking for identiifcation of the other accounts, and the creditor doing the actual payment to the other creditor(s). That minimizes overall risk increase by assuring shifting of the deck chairs only, with no significant overalll revolving debt increase.
However, some "balance transfers" are done by way of the creditor sending you a "courtesy check" and letting you do any transfers to other cards. Obviously, the creditor cannot assure that all of the check will be used to offset existing debt, and some could be retained in your checking account or used to buy that sleek new big-screen TV. In that event, your overall revolving debt could increase significantly, as would then your risk of repayment.
I would assume that a creditor who does a BT by way of courtesy check will do a soft pull within a month or two to then reassess how you applied the "transfer," and whether or not your overall revolving debt/% util increased significantly after you received the funds.
If you apply the full BT towards other existing revolving debt, then the creditor will likely not raise any red flag.
However, if you had a more liberal type of BT procedure that let you complete any actual "transfer," and you used a portion for some other reason, then there may be a later red flag.
Will your transaction be a full balance "transfer?"
