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How Balance Transfers Affect Your Credit Score
A balance transfer can help or temporarily hurt your credit score depending on how it's executed — the new account inquiry causes a small dip, while lower utilization on the old card can help over time.
Short-Term vs. Long-Term Impact
| Factor | Short-Term Effect | Long-Term Effect |
|---|---|---|
| Hard inquiry (new card) | Small, temporary dip | Fades within months |
| Lower utilization on old card | None immediately | Can improve score |
| New account (lowers average age) | Small dip possible | Recovers as account ages |
Utilization Impact
Moving debt to a new card can actually improve your utilization ratio if it spreads the balance across more total available credit — a meaningful factor in your overall score.
Keep the Old Account Open
Closing the old card after transferring reduces your total available credit, which can hurt your utilization ratio — consider keeping it open with a zero balance instead.
Common Mistakes
Closing the old card immediately after transferring, which can spike your utilization ratio on remaining accounts and hurt your score more than the transfer itself helped.
Frequently Asked Questions
There's a small, temporary dip from the new account's hard inquiry, but this typically fades within a few months, especially with responsible use of the new card.
Generally no — keeping it open (even with a zero balance) helps maintain your total available credit and account age, both positive factors for your score.