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Research: Improving credit score when you opt for 0% balance transfers -

Balance transfers do affect credit scores, and this is a fact that most people are aware of by now. Anyhow, that is not entirely true as it depends on a lot of other factors. It is still possible to improve one`s credit score while doing a balance transfer if adequate measures are taken. However, this can have an adverse effect if the credit score is damaged while doing a balance transfer.

In order to get a better idea of how the credit scores can get affected it is recommended that one goes through the free credit monitoring services that will give the actual picture as to what could go wrong in a particular scenario and where, when and how credit scores are likely to get affected. The best offer is from IDENTITY GUARD, as this service provides access to all the credit scores for one month where credit score forecasts are provided as well.


• Closing or canceling a credit card while doing balance transfers can have a negative impact as it reduces the overall credit limit that would be available to you. Hence to a lender it would appear as if you are exceeding your credit limit and this could have a detrimental effect on your credit score.

• Don't close the credit card while doing a balance transfer, especially if the card is more than two years old. This is more important if the credit history has been good. By closing the old card all the credit history on that card is lost especially if it is one of the oldest cards.

Balance transfers can have a positive effect also. We are taking an example and illustrating the scenario on the basis of that.

• While keeping the old card open, consolidate the high interest balances and put them on the new card. Here we will take an example of someone who has a $1,200 debt which has been transferred onto a new card which has a credit limit of $5,000. As per the score estimator, the credit score will go up by an average of at least 3 points. It might have no effect on one company, a 2-point increase with the next company, or a 7-point increase in the company.

• Pay off some of the debts and consolidate all the high-interest balances. Here let's assume that a new card has been approved with a credit limit of $5,000 and about 20% of the debts are cleared. Again the credit score is up by two points.

Both these examples illustrate just one thing. If balance transfers are executed properly they can have little effect or a positive effect on the credit scores. Although one must note that individual results might vary. In order to get a better understanding of how balance transfers work, it is strongly recommended that one uses the credit score estimator for an accurate analysis of the credit scores.

To give a quick boost to the credit scores an easy tip to follow is to pay up before the due date every month.