Will a balance transfer affect my credit score?

Yes, a balance transfer can affect your credit score in both positive and negative ways. When you apply for a balance transfer credit card, the lender will check your credit report, which can result in a temporary dip in your credit score due to a hard inquiry. Additionally, when you transfer a balance to a new credit card, it can increase your credit utilization rate, which is the amount of credit you are using compared to your total credit limit. A high credit utilization rate can negatively impact your credit score.

However, if you make timely payments on your balance transfer credit card, it can have a positive impact on your credit score. By paying off your debt, you are improving your credit utilization rate, which can improve your credit score. Additionally, making timely payments can help establish a positive payment history, which is a key factor in determining your credit score.