What happens to my credit if my credit card is lost or stolen?

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If your credit card has been lost or worse, stolen then the first thing you need to do is to call the credit card issuer. That stops any potential abuse of your card because the issuer will close down the account. And, if you do business with a good issuer they’ll likely FedEx or UPS you a new card the next day.

Contact the card issuer

When you contact the credit card issuer, they close your account.  This account will likely be reported to the credit bureaus as “lost or stolen” and is considered the same as a closed account by creditors viewing your credit report and by credit scoring models calculating score.

You will be issued a credit card with a new number. There are two ways the information on your new account can be reported to the bureaus. 1) with the credit history maintained or 2) as a new account with no former credit history.

Most credit card issuers cancel the old number and transfer the previous account information to the new account number. This has no impact on your credit, because the history on the account is transferred to the new account. The information transferred includes how the long the account has been opened and the payment history such as how the account has been paid (on time or late). The credit limit and the balance on the account remain the same.

The creditor could issue the new card as a new account and not transfer any of the historical information to it such as date opened or payment history. This date the account was open becomes the current date and is treated like a new account on your credit report.  If the original account was opened over two years ago, the new account could impact your credit negatively.  If the original account was opened less than two years ago, this new account won’t have much impact on your credit score, because the original account was also considered a new account.

Contact the credit bureaus

If you are a victim of fraud, the credit bureaus will place a fraud alert on that account for free, but they may require a police report to do so.  The alert lets creditors know that you have been a victim of fraud.

You can also place a credit freeze on your account, which prohibits a new creditor from viewing your credit report without your permission or approving a new account.  This service is not offered for free.  You can unfreeze the account temporarily to permit a company to review your credit report, but for a fee.

It is important to make sure you keep your credit cards and your wallet secure.  It is a good practice to make sure you receive your credit card back from the clerk or machine and put it back in the same place.  A lost or stolen card will not hurt your credit in most cases, but a stolen card can cause problems, if it results in identity theft.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  You can follow John on Twitter here.