This is an interesting topic I was recently asked to discuss.

Replacing a lost or stolen credit card should not hurt your credit score as the old account is simply transferred to a new account number & reported to Equifax & TransUnion accordingly. The old closed accounts would show as closed with zero balance.

Problems, however, can arise when lost or stolen credit cards are closed without transferring them to a new account through the card provider. This could happen when you have zero balances and assume there is no urgency in getting an uncompromised card. Credit scores are algorithm generated numbers and are effected by such events as not using credit and not paying at least the minimum payment by the due date.

The good news is that your beacon score fluctuates up and down in a predictable way and what can be done can be undone quickly.

Should you find yourself in a postion where your beacon score is suffering for this reason, visit your bank or other credit card provider. Explain you cancelled your lost or stolen credit card but did not transfer it to a new account. Provided there are no red flags they will identify you & usually will be more than happy to open a new credit card account for you on the spot. The new account should report to Equifax & TransUnion as an active account within 30 days of it’s first use.

The ideal way to use a credit card is to have your recurring payments such as Netflix, etc go on the card & to pay off the balance in full by the due date every month. Some people do the same with their groceries and, if it’s a points card, there are benefits to putting almost everything on the card to accumulate points faster. The key is to pay the balance in full by the due date every month or you will incur interest.

You can get your free Equifax credit report in Canada by dialing 1-800-465-7166, confirming your identity with their automated system & your credit report will usually arrive via mail within 5 business days in most cases.

I recommend you self-pull your Equifax report before and after any credit issue such as the one discussed here.

If this post has helped you in any way, please let me know by leaving a comment below.

All the best – DGB

Useful Links

Equifax – How Are Credit Scores Calculated?

How else is your credit report used?

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