If you are trying to rebuild your credit, you may be wondering if transferring balances will hurt your credit score. The answer will depend on a variety of factors. It’s important to understand how your credit score is calculated before looking at how transferring balances affects your score.

Your credit score is affected by a number of factors. Some of the biggest factors include: total amount owed, age of credit lines, amount of total credit lines, percentage of debt in relation to open credit lines, payment history, recent credit applications, and on-time payment history. Age of credit counts accounts for roughly 15% of your total credit score. This means that the longer you’ve had credit with a particular creditor, the higher your score will be. When it comes to your credit score, newer credit lines are not nearly as valuable as older, aged credit lines.

Applications for new credit cards can hurt your score. If you have too many new credit card applications, it signifies that you’re looking to add more debt to your current total debt. Too many inquiries into your credit report can lower your credit score.

So, how does transferring a balance affect your score? Transferring a credit card balance to an account that’s already open won’t lower your credit score. However, if you open a new credit card and transfer a balance, then that can lower your credit score. This is because lenders are wary of new credit card accounts. Desperate borrowers often attempt to open new credit card accounts after they have maxed out their current lines of credit.

Another factor that can lower your credit score is maxing out all your available credit lines. Generally speaking, if your credit card balance exceeds 50% of your total credit line, then this can lower your credit score. Lenders like to see that you are not using the full amount of your credit lines.