A balance transfer may adversely affect your credit score, but its impact can vary greatly.

When you choose to execute a credit card balance transfer, you’re essentially moving credit card debt from one credit card to another.

In many cases, a balance transfer requires you to open a new credit card account, which will probably drag your credit score lower.

However, you can move a balance from one credit card to another existing credit card, which should lessen any credit score impact.

In either situation, it’s impossible to say how many points your credit score will fall, or for how long, because it’s contingent on a number of other factors related to your unique credit history.

As a rule of thumb, the deeper and more positive your credit history, the less impact a balance transfer will have. And vice versa.

Regardless, a balance transfer isn’t a negative event; it’s simply a request for new credit, which is known as an inquiry.

Credit inquiries typically lower credit scores temporarily, but only by a marginal amount.

Is a Credit Report Required for a Balance Transfer?

Generally, if you fill out a balance transfer request the credit card issuer will pull a credit report to determine your eligibility.

The inquiry will also show up on your credit report, and will stay there for about two years.

Over time, the impact of the balance transfer request will fade; it’s strongest in the beginning because you’ve just made a request for new credit.

FYI: You’re deemed a higher credit risk when you’re actively shopping for new credit.

There are times when a credit card issuer won’t pull credit, but those scenarios are somewhat rare – pre-approved balance transfer offers, extended by your current credit card issuers, may not require a credit check.

Either way, the impact of new credit is the smallest factor in determining your Fico score, so you shouldn’t worry too much.

In conclusion, saving money via a 0% APR balance transfer will probably outweigh any negative impact of a balance transfer on your credit score (is a balance transfer a good idea?).

Just be sure to utilize balance transfers only when necessary, as numerous requests, especially in a short period of time, can adversely affect your credit.  You may also get rejected.

Tip: Avoid balance transfer requests when applying for more significant loans, such as auto loans or mortgages, as temporary declines in credit score are possible.