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

Submitted by Fasfeed on Fri, 02/08/2008 - 01:24

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.

Most credit card companies actually report to the credit bureaus that it is the same account when you close and reopen a credit card due to fraud. Although you are issued a new account number it is like nothing ever changed. As for disputing I noticed a forum thread for disputing your credit here. I have a very simple ebook for sale on my website about repairing your credit that I would be more than happy to give you a free copy of if your still having troubles.

Fri, 02/08/2008 - 02:55 Permalink

Did you call it in to the company as stolen? If you did, then it should have been reported to the credit reporting agencies that way, you can always go to each credit reporting page and file the disputes electronically on each of them.

goodluck, hope you get this all straighten out.

Fri, 02/08/2008 - 03:35 Permalink

Closing a good account will damage your score.
In the event of a stolen card, you aren't liable for more than $50 (which many banks will also waive)...the account isn't usually closed, the old card is deactivated, and a new card is issued to you. You may need to file a police report attesting to the loss of the card and fraudulent charges, and provide it to the creditor.

Fri, 02/08/2008 - 05:48 Permalink

I did report card as stolen. Luckily it hadn't been used.Thanks for the great input and quick response!!! Account was closed and new card with different number issued.

Sat, 02/09/2008 - 03:39 Permalink

Yeah I think people panic when their cards are stolen and instead of just asking for a deactivation they cancel their account. I remember I had a good experience when this happened with our credit card years ago. The representative I had did advise me that if i closed our account that it would affect our credit rating. rather, they immediately deactivatedt he card and sent me a new one in the mail. this is the most effective way to handle a lost/stolen card. fasfeed, glad you were able to deal with your situation!!

Sat, 02/09/2008 - 17:02 Permalink

You do have the option to deactivate, which then by the time they get it all figured out, you can then have a new card issued on the account and continue to use it under the same account. Ask the company to transfer you history over to the new account.

Tue, 02/12/2008 - 03:19 Permalink

I had lost my card around two years back and did not know about it until a week. I called up the company and they helped me out. I received very strong support from them. Infact they were the ones who asked me to deactivate rather than cancel it. The account I maintained showed good history thus they did not think it was prudent to cancel the card. I was new to the concept so It was great help for me. Now I am aware so its easier for me.

Tue, 02/12/2008 - 06:58 Permalink

Closing a card affects two parts of the credit score calculation – the level of debt and the length of credit history. Understand then that doing this will lower your credit score especially when your credit card account still has a balance and when it has available credit while your other credit cards don’t. Additionally, you credit score will be badly affected when you close your oldest credit card and when you have no other credit cards or loans to use.

Thu, 09/11/2008 - 01:40 Permalink

Hi Mirage
You are correct. Since 35% of your credit score depends upon your payment history, making timely payments on your credit card helps you to improve your credit score. Another thing which you said is the amounts owed, ie the total amount which is due to the creditors. This amount due constitutes 30% in your credit score and so you should not use more than 30% of the available credit limit on your credit card. Other factors such as length of credit history, new credit and types of credit in use constitutes 15%, 10% and 10% of your credit score. So closing a credit card account will lower your credit score due to reduction in points which comes through credit history (35%) and length of the credit history (15%). In other words 50% of your credit score is affected due to closing of an old account.

Thu, 09/11/2008 - 09:01 Permalink

Well thanks guys. I was considering on closing one of my accounts until I read this. It does happen to be my oldest but not a card that was really needed. I am now reconsidering because of teh damage it could do. Thanks again.

Thu, 09/11/2008 - 17:06 Permalink

It is good to keep old accounts open fireyone, this will make your available credit more and in turn make your score higher.

Sat, 09/13/2008 - 00:38 Permalink

Yes I think once it is paid I will just freeze it or maybe just not carry it. When I worked at the store I had people always asking me to look up their account number when checking out. Being myself I would ask if tehy misplaces their card and would get a laugh out of the responc=se. "no I cut it up so I wouldn't use it anymore". So I would ask if they wanted the company to send another (since in fact they were still using it anyway). I would get "No If I always have to bother someone to look it up then I won't charge as much".
It is hard when they put those 50% off sells near Christmas. You always see the perfect gift trhen. This is where I would get in trouble. I very rarely visit the store now.And even though it is only ten min. away and I go past it a few times a week I still mail my payment to another state just to keep from goiing in.

Sat, 09/13/2008 - 13:46 Permalink
DOnald (not verified)

Hi Carol, few days ago my wallet got stolen and I called to notify Bank of America right away (3 credit cards)

NOw I just found out that they reported it to credit agency resulting my credit score to drastically lowered.

What Can I do to fix this? thank you

Tue, 04/05/2011 - 17:17 Permalink
desidoll (not verified)

I had a card with HSBC which i used for sometime, i was late with few payments which corrected, and brought the card to current. I than lost that card, and i was late again with few more payments. I finally decided to pay off the entire balance and close my account.

Now i see that HSBC is reporting two account, and both are showing late payments. One is reported card lost or stolen. I'm not sure how this would effect my credit. Can you help me on what i should do to correct this? or should I not do anything?

Fri, 05/27/2011 - 21:23 Permalink
Natalie (not verified)

I reported my credit card lost or stolen because I gave the # to a guy who was promoting a 1,000 dollar grocery voucher survey by phone. He said it would only be three dollars but i got scared and after hanging up decided to google this and realized many people got scammed. Will this mess up my credit even though its not actually stolen or lost.

Wed, 11/30/2011 - 20:16 Permalink

Natalie..did you report your credit card stolen right away?? Usually, if you do that, the CRA's will put a 'freeze' on your CC's, debit cards, etc. (I've had this done when my wallet was stolen). Also..the CC agencies can tell where the CC was used. It shouldn't hurt your credit at all if you called your CC and explained what happened. They will probably cancel the one you had and issue out another one. Yep...becareful of the scams!! I have telemarketers calling alot telling me about this "wonderful deal" that I can "ONLY" use a debit or CC with. Oh, please!! Nope....I don't fall for that anymore!!

Sun, 01/01/2012 - 18:35 Permalink
Jay H. (not verified)

I went on vacation and let my sister house sit for me. I had my car at a mechanic when I left, and left a credit card with her to pay the bill. She is a very trustworthy person and I know she was not involved in the cards disappearance. One time she actually was given the wrong change by 3 cents and drove all the way back to the store to return the extra change! Anyway, when I returned home my card company called and said that there were some fraudulent looking charges on the card. Unfortunately after I called her she could not find the card where she had put it. Someone stole the card and used more than 3 thousand dollars at various stores and restaurants. After two weeks of waiting the card company called and said that the card would not be covered because it was in her hands and not mine. Even though it was stolen and used by who knows. I wanted to watch the videos of the card being used at the stores to find out who, but by the time I arrived home it was too late and the card had already been frozen for a couple of days. Is there anything that I can do? Or am I totally stuck with the bill of feeding and clothing thief's? Thanks!

Wed, 02/22/2012 - 02:17 Permalink
robert dunn (not verified)

my cards aren't lost or stolen but my ex wife has the card information and i'd like to get new cards issued without effecting my credit score

Sat, 04/14/2012 - 16:34 Permalink
Frank10101 (not verified)

Is it better for my credit score to report a unused store Credit Card as lost, but not longer needed or replaced, than to just cancel it.

Sun, 02/14/2016 - 18:42 Permalink