A balance transfer does not affect your credit score directly. Balance transfers aren’t flagged on your credit reports, and credit scoring companies don’t specifically factor them into their evaluation criteria. However, a balance transfer can lead to changes in your financial profile that will affect your credit score.
For example, a balance transfer can lead to a high credit utilization rate. Generally, you’ll want to use up less than 30% of a card’s credit limit. A balance transfer can wind up consuming much more than that, which isn’t great for your credit score.
In the best-case scenario, you’ll transfer your balance to a card with a credit limit much higher than the amount you need to transfer as well as pay off the original credit account in full. Then, the transferred balance won’t max out your new card, and you’ll be able to bring your old card’s utilization to zero.
Making payments on time is a crucial part of both maintaining a good credit score and using a balance transfer to your credit score’s advantage. Paying off the balance that you transfer and avoiding unnecessary debt in the future will also positively affect your credit score. You can read WalletHub’s in-depth guide on balance transfers for more information.