Transfered balance. How will FICO score respond

[Anonymous]

While activating my CapOne card today (old one expires next Feb.) I decided to see if I could lower my rate from 25%. I currently don't have a balance, but hey what they heck, I wanted to try just in case of an emergency and I needed to use the card I didn't want to have to pay 25%! So, surprisingly they offered to lower my rate going forward to 9% for both transfered balances, and regular purchases. Woot! This is a rate that doesn't expire in say 6 months. I decided to transfer a balance I had on my BoA ($1600.00 @ 21.99%) to CapOne. 

My question is, I hope this was a wise decision to make in terms of how it will affect my FICO score if all all? How does FICO respond to transferring balances?

From a standpoint of paying down the balance I'll be able to of course put more $$ towards the principle, thus paying it off faster! That of course will reflect postively on my score.

If you're wondering, I called BoA today. They won't lower my rate even after 18 years of having the card! :-( 

Thanks,

—Steve 

[Anonymous]

the limits on the cards will be a factor. if the cap1 has a higher limit you're triple golden. lower rate, higher individual utilization and equal overall utilization.

if the cap1 has a lower limit than boa then the reverse applys. either way if both accounts report with a balance in the same month there will be a score hiccup, but should be corrected the next reporting cycle.

[Anonymous]

---

@Anonymous wrote:

the limits on the cards will be a factor. if the cap1 has a higher limit you're triple golden. lower rate, higher individual utilization and equal overall utilization.

if the cap1 has a lower limit than boa then the reverse applys. either way if both accounts report with a balance in the same month there will be a score hiccup, but should be corrected the next reporting cycle.

---

Thanks imducky for the post. Well doesn't look like I'm triple golden. Maybe just golden?  The CL on CapOne is indeed lower than BoA. BoA=$3600.00/CapOne=$3000.00. I'm transferring $1600.00 So the individual Util ratio is going to be narrower. <sigh> I'll be able to pay it off faster though and the indivudal Util will increase.

 

Thanks for the education on that Util is not just reflected overall but reflected indivudally as well. Good to realize this!

—Steve 

[Woodpaq]

I would like to add, as one who has been doing Transfer balances for 6 years, that after checking my credit reports about twice a year, I get a ding for the same things over and over again. 

1. You've opened more that 3 cards this year

2.  You've exceeded more that 50% of the credit limit

3.  There are "X" amount of credit inquiries (due to opening new cc's).

My score probably does a 20-50 point nose dive when I do a balance transfer but I always take into account the benefits.  I always (up to today's credit crunch) was able to do 0% offers for either 6 or 12 months depending on the institution who offered the card and balance I qualified for.  I also consider that, if the transfer amount doesn't cover my full debt total, I have to apply for multiple cards, so there's your credit inquiries and of course I have to do full balance of that new transfer card, so there's your 50% or more util. 

The good thing is that I save money and that's been my bottom line.  9-14% rate is probably good for most people, but it doesn't beat 0% over the term of the "teaser" rate though you have that 3% fee to contend with.  It just takes constant monitoring and regular payments to really maximize the benefits of rolling the leftover debt to more and more cards until debt is minimized or paid off.  I posted before that I'd concentrate on the moderate cards that I could see being paid off by the end of the teaser rate, but failed to realize that the cards that were near max were the ones that impacted my scores, so now I'm working on getting my BoA 8,300 card down to under 4,000 (10,000 total limit) and this should bolster me to about the high 700's where I wanna be, maybe low 800's where I reallllllllly wanna be.  Currently am at 748 avg score.