When we have something important, we go well above and beyond to protect it. We place security systems for our homes, we make sure we lock our car’s doors, we put passwords on our phones. We do everything in our power to make sure that what is important is safe and sound.


However, even when we take all the necessary precautions to safeguard our possessions, sometimes, things just happen way beyond our control. That is why we cannot help but feel dread when something of ours gets lost, or even worse, gets stolen.


Credit cards, which are great financial tools of convenience and security, much like our valuables, sometimes, get lost and stolen as well. And when this happens, you might be wondering if, this once great asset, will come and bite your credit.


Don’t worry! A lost or stolen credit card should not hurt your credit- at least, not directly. But, if you do not take the proper measures after you realize your credit card is, in fact, missing, it can; and it will. 


Common Misconception

A lot of consumers are under the impression that when you report a lost or stolen card to your credit card issuer, your credit card account, which was reported to have a lost or stolen card, will be closed and that you will be provided a new one as a replacement. This is false.


Yes, closing down a credit card account can, in fact, hurt your credit. By closing a credit card account, you are, in essence, shortening the age of your credit history, which makes up fifteen percent of your credit score. Closing a credit card account can also lower your credit limit, which, in turn, affects your credit utilization rate, which makes up thirty percent of your credit score.


However, most credit card issuers or companies do not actually close your credit card account down when you report a lost or stolen credit card. Your ‘old’ account’s information is, simply, carried over to a new account. Meaning, your credit age, as well as your credit limit, will remain unchanged. This is basically, a merge between your lost and stolen credit card’s account with a new one.


How A Lost or Stolen Card Can Hurt Your Credit

When we lose our credit card, we can only hope that we find it, or in the best case, someone else returns it to us. However, that is not the case in some cases. Some individuals who happen to stumble upon your credit card or individuals who deliberately stole it from you, may, and will, attempt to use it for nefarious activities.


This is the case with most credit card fraud cases- and is something you would not wish on anyone. Fraudulent credit card issues can be, at times, difficult to sort out- which can cause long-lasting damage to your credit. And as the name holder of the credit card, you are responsible for any balances accumulated.


Fortunately, most credit card issuers will not hold the cardholder responsible for the fraudulent charges made by the thieves. But, this only applies, if you have reported that your credit card has been lost or stolen. If you fail to alert your credit card issuer about the unfortunate state of your credit card and do not pay the balances racked up due to this incident, the negative information will be reported to the Credit Reporting Bureaus- thus, hurting your credit.


Your credit may also suffer if your automatic monthly payments do not reflect your new credit card information. Even when you get a replacement card, for the lost or stolen one, your automatic monthly payments, prior to the incident, will not automatically be shifted to your new card. This must be done manually.


If your prior monthly obligations attempt to charge your old account, they will be declined by your credit card issuer. If you do not try and correct the situation in a timely manner, you could end up racking up delinquencies in your credit report. 


It is also worth mentioning, that if you have had delinquencies on your missing credit card, or if your credit score is lower now than when you opened the account, your credit card issuer may decline to provide you with a replacement account, and ultimately closes your old one. When this happens, not only will it cause you great inconvenience, due to the fact that you no longer have a card to use, but also hurt your credit, since your account, especially older ones, is being removed.


What Can I Do?

When you realize your credit card is lost or missing, that first thing anyone should do is to contact their credit card company and report the incident. Time is of the essence here. The sooner you report the state of your credit card, the less the chances of anything that can hurt your credit will happen.


While we did mention that credit card issuers, who will provide you with a new credit card account, will merge your old account’s information with the new one, some do not. Find out what your credit card issuer’s policies are regarding credit card replacements and credit reporting. That way, you can rest assured that your credit report still reflects the information and activities of your old credit card account.


The next step you should take after you have reported your lost or stolen credit card is to make a list of every automatic payment shouldered by your original card. This way, as soon as you receive your replacement credit card, you can make the necessary changes regarding your automatic payments- thus avoiding late payments and other delinquencies.


You can also try and monitor your credit report activity. By reviewing your credit report, you can identify early signs of possible fraudulent activity, which was the result of individuals using your missing card for illegal means.


The Bottom Line

A lost or stolen credit card is something you should try to prevent, at all costs. While losing your credit card, as a result of misplacing it or getting it stolen, does not directly hurt your credit, it can. Immediately contact your credit card company and report the incident to them as soon as you realize that your card is missing. This will reduce the chances of your missing credit card from hurting you.


Have you had your credit card used by fraudsters? This can negatively hurt your credit, and for a while, if you do not do something about it. Seek help from the credit experts and stop those fraudulent charges from hurting you and your credit. Call us at 888-799-7267 to schedule a Free Credit Consultation.


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