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Lost or stolen cards – Will they affect your credit score?

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Carol
Author:
Carol
Community Contributor

A lost or stolen credit card can cause a lot of damage to your credit, especially when you have good credit. If you have become a victim of credit card theft, then you should take the necessary steps immediately. Otherwise, thieves can use up your credit limit without paying down the loan. As a result, delinquent accounts will be reported on your credit report and your score will get hurt.

Lost or stolen cards – How will they affect your credit score?

If you have lost your card or it has been stolen, report it to the credit card company as quickly as possible. Reporting the lost or stolen card to the credit card company will not drop your credit score. Generally, the card company will not inform the credit bureau about a fraudulent charge.

According to Fair Credit Billing Act (FCBA), the maximum liability for unauthorized use of credit cards is $50. However, if you inform your card issuer as soon as possible, then you will not be held liable for any unauthorized charges. Every credit card company offers fraud protection on their accounts, so if a fraudulent charge is made on a lost or stolen card, you will be protected. Therefore, it is better to report a lost or stolen card as soon as possible.

Under such circumstances, the credit cards companies will deactivate the account rather than closing it. They then issue a new or a replacement card to you and transfer your balance to the new account for free. Although you will get a new account number, your credit score will not get a hit.

However, if you choose to close the account, then your credit score may get hurt. If you close the account, you will be charged the outstanding balance immediately, which may cause you problems. That is why the representatives at the card companies usually don't advise the consumers who have lost their cards to close an account that has an outstanding balance on it because it will have a negative impact on their credit score.

Smart tips to avoid losing credit cards

Here are some useful tips that can help you avoid losing credit cards:

  • Carry one card: It is advisable to carry only those credit cards that you really need. It is better to not carry several cards at the same time even if you're close to home.

  • Keep your cards in a safe place: You should always keep your credit cards in your purse or wallet. Make sure your purse and/or wallet is with you at all times.

  • Don't lend your credit card: Don't lend your credit card to anyone you don’t absolutely trust.

  • Don't write down your card number: Don't write down your credit card number or debit card PIN number anywhere.

  • Check your account status: You should always check your card account status periodically and review your monthly statement for unauthorized charges.

 

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