Improving credit score when you opt for 0% balance transfers


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Balance Transfer Cards » Improving credit score when you opt for 0% balance transfers

Improving credit score when you opt for 0% balance transfers

The content is accurate at the time of publication and is subject to change.
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. Don'ts • 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.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!