Credit Score Basics > Does transferring money from credit card affect credit score?

Does transferring money from credit card affect credit score?

Wollit Team2 minute read · Updated 18th September 2024

No, transferring money from your credit card does not affect your credit score. That’s not to say that it can’t indirectly do that. Here is how it works.

How does transferring money from a credit card work?

A money transfer from a credit card means moving funds directly from your credit card into your bank account. This can be useful for lots of reasons, like paying bills or covering unexpected expenses. To do a money transfer, you usually need to request it through your credit card provider. They will then move the amount you specify into your bank account.

This sounds simple, but you should keep in mind three things:

This is very different from a balance transfer, which involves moving debt from one credit card to another.
Also, most money transfers come with fees, usually around 3% to 5% of the total amount transferred.
And depending on your credit card agreement, you may even incur interest charges on the amount transferred.

What about balance transfers?

A balance transfer is when you move debt from one credit card to another, usually to take advantage of lower interest rates. This is very different from cash transfers, and can actually help you get out of credit card debt.

Does transferring money from my credit card impact my credit score?

No, transferring money from a credit card does not directly affect your credit score.

Money transfers themselves are not reported to credit reference agencies like Experian or Equifax. As a result, they do not show up on your credit report.

However, while money transfers do not directly affect your score, they can have a few indirect effects on your credit:

If you transfer money and do not pay off your balance quickly, this can increase your overall debt levels. Higher debt levels can mean a higher credit utilisation ratio, which does matter for your credit score. Lenders will also not see more debt favourably.
If the transfer leads you to miss payments on other debts because of cash flow issues, this will harm your payment history and ultimately lower your score.

At the end of the day, though, what lenders care most about is your credit history.

Luckily, now there are many apps that can help you build and improve credit.

One such app is Wollit. Wollit is an app that reports your monthly subscription as loan repayment, helping you build a history of timely repayments without the risk of getting hit with high-interest charges or going over your card limit. It can even report your monthly rent payment to Experian, adding another line in your credit report that shows lenders you're responsible and pay your bills on time.