HOW LOST OR STOLEN CREDIT CARD AFFECTS A CREDIT SCORE
No, as long as you take the proper steps and report it immediately. Many consumers worry about its effect on their credit score. One of the factors authorities look at is the length of time accounts have been open. Good thing majority of credit card companies do not close an account when the owner reports the card is either lost or stolen. They simply consolidate details from your old account, including account open date and transaction history, into the new one.
Here are the common threats to an individual’s credit report and score.
The person who steals the card or finds your lost card may attempt to use it illegally. Since your name is written on the account, you are responsible for any balance accumulated on the card. If another person racks up charges and you do not pay the balance, this negative information may reflect on your credit score.
Another is if your card is lost or stolen and you fail to transfer automatic monthly payments, including utility bills and subscription charges, to your new card number. Credit card companies decline such charges when made to the old account number. If you do not report a lost or stolen credit card the soonest time possible, the declined charges may be endorsed to a collection agencies. You know what happens from here, right? Agencies report these charges to the credit bureaus. Remember, collection accounts aggravate a credit score. It can even lower your score.
There are times credit card companies refuse to issue a new card in the event an existing card is missing or stolen. A lost or stolen card leads to an account review in some cases. The credit card company examines a client’s transaction history and entire credit report. They have the discretion to close your account if they discovered any delinquent payments or your credit score has slumped after opening the account. Not only it is inconvenient, but also affects your credit.
So, if your card is missing or has been stolen, inform your credit card company right away. Then, give the police a heads up. The sooner you cancel your account, the less time the person who stole it has to incur charges. The credit card firm’s representative can dispute any transactions not made by you. That way, you will not pay for it and it won’t be reported to the credit bureaus. Also, find out how the credit card company reports replacement cards to the authorities to ensure it won’t look like you closed an old account and opened a new one.
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