TUMBLR custom domain affect SEO?

I have a tumblr blog ranking good for my keywords and I am considering using a custom domain with those keywords.
Question is: Tumblr say that they redirect to custom domain so does that mean the old tumblr domain will be ranking rather than the custom domain?
Are custom domains generally better for SEO with tumblr?

The old Tumblog will initially rank higher, and then as Google starts caching the redirect the site will take over those rankings. You can also use Google Webmaster Tools to inform them of a domain move (which this is) - although I have no idea if you can have a Tumblog on Webmaster Tools?

Is it really worth the effort in terms of SEO?