How Balance Transfers Impact FICO Scores
Written by Tim Peak on October 27, 2011.
Need money for a small home remodeling job, or to make much needed car repairs? Or do you simply want to use a 0 percent balance transfer offer to pay down high-interest credit card debt?
Before you apply for that new balance transfer card, make sure you know the ins and outs of how balance transfers impact FICO scores so you can minimize potential disadvantages.
Taking out a balance transfer may lower your FICO score in the short-term. But it can also help boost your score over time. Here are the three ways in which taking out a balance transfer will impact your credit score.
1. Opening a new account will shorten the average length of your credit history. Any time you open a new credit card, it will shorten the average length of your overall credit history.
“About 15 percent of your FICO score takes into account the length of your credit history,” says Kim McGrigg, Community and Media Relations Manager at Money Management International. “Pa