If your card is changing from one issuer to another, there’s a chance that your credit score could be impacted. For example, when the Costco Anywhere Visa® Card by Citi moved from AmEx to Citi, some cardholders saw a temporary drop in their score. In some cases, the old issuer could report the account “closed” before the updated account has been added to cardholders’ credit reports by the new issuer. As such, scores could drop for some cardholders — albeit temporarily.
Do Reissued Credit Cards Hurt Credit Scores?
Make sure replaced credit cards do not appear as a new account on your credit report.
Summary:
Your predicament is not uncommon. In the past year, almost one in five consumers had a credit card replaced because it had been compromised, according to a report by Javelin Strategy & Research. Customers of the TJX companies, which include retailers TJ Maxx and Marshalls, were particularly hard hit. More than 45 million credit- and debit-card numbers were stolen from the company’s database.
Q: Three of my four credit cards have been reissued in the past six months. One was re-issued with a new number because of possible fraud; another was reissued because Citi had upgraded it. Finally, one card was reissued with a new number because I had used it at TJ Maxx. My fourth card is less than a year old. Will the reissued cards hurt my credit score?
A: A replacement card should not affect your credit score, says Craig Watts of Fair Isaac, which created the FICO credit score. “FICO will see the account as a single history, even though there are two account numbers.”
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Will a Change to My Credit Card Number Hurt My Score?
The new number is linked to the same account, so your score shouldn’t suffer. But you’re not out of the woods yet.
Erin El Issa
Senior Writer | Data analysis, personal finance, credit cards
Erin El Issa writes data-driven studies about personal finance, credit cards, travel, investing, banking, and student loans. She loves numbers and aims to demystify data sets to help consumers improve their financial lives. Before becoming a Nerd in 2014, she worked as a tax accountant and freelance personal finance writer. Erin’s work has been cited by The New York Times, CNBC, the “Today” show, Forbes, and elsewhere. In her spare time, Erin reads voraciously and tries in vain to keep up with her two kids. She is based in Ypsilanti, Michigan.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners, and here’s how we make money.
Q: Will getting a new credit card number hurt my credit score?
A: When your issuer needs to change your credit card number, they’ll send you a replacement card with a new number. It’s linked to the same account you’ve been using all along. Nothing on your credit report will change in any way that would affect your score. There’s no credit check, and the old card isn’t reported as a closed account. The replacement card isn’t reported as a new account. The age of the account, its payment history, and all other pertinent data apply to the new card just like the old one. So getting a new card number won’t hurt your score.
Q: What about when a credit card changes issuers?
A: If your card is changing from one issuer to another, there’s a chance that your credit score could be impacted. For example, when the Costco Anywhere Visa® Card by Citi moved from AmEx to Citi, some cardholders saw a temporary drop in their score. In some cases, the old issuer could report the account “closed” before the updated account has been added to cardholders’ credit reports by the new issuer. As such, scores could drop for some cardholders — albeit temporarily.
Q: Is there anything else I should keep in mind?
A: Keep in mind that any bills that you’d set up to automatically pay with your credit card — subscriptions, gym memberships, and so on — may continue to be charged to the old number. Since that number has been canceled, the payments will be rejected, and you could get hit with penalties, late fees, account cancellations, and other hassles from those merchants. Your power or water could be shut off if the utility company doesn’t receive payment.
If your card is changing from one issuer to another, there’s a chance that your credit score could be impacted. For example, when the Costco Anywhere Visa® Card by Citi moved from AmEx to Citi, some cardholders saw a temporary drop in their score. In some cases the old issuer could report the account “closed” before the updated account has been added to cardholders’ credit reports by the new issuer. As such, scores could drop for some cardholders — albeit temporarily.
Do Reissued Credit Cards Hurt Credit Scores?
Make sure replaced credit cards do not appear as a new account on your credit report.
published 31 March 2008
Q: Three of my four credit cards have been reissued in the past six months. One was re-issued with a new number because of possible fraud; another was reissued because Citi had upgraded it. Finally, one card was reissued with a new number because I had used it at TJ Maxx. My fourth card is less than a year old. Will the reissued cards hurt my credit score?
Your predicament is not uncommon. In the past year, almost one in five consumers had a credit card replaced because it had been compromised, according to a report by Javelin Strategy & Research. Customers of the TJX companies, which include retailers TJ Maxx and Marshalls, were particularly hard hit. More than 45 million credit- and debit-card numbers were stolen from the company’s database.
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A replacement card should not affect your credit score, says Craig Watts of Fair Isaac, which created the FICO credit score. “FICO will see the account as a single history, even though there are two account numbers.”
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
Will a Change to My Credit Card Number Hurt My Score?
The new number is linked to the same account, so your score shouldn’t suffer. But you’re not out of the woods yet.
Erin El Issa
Senior Writer | Data analysis, personal finance, credit cards
Erin El Issa writes data-driven studies about personal finance, credit cards, travel, investing, banking and student loans. She loves numbers and aims to demystify data sets to help consumers improve their financial lives. Before becoming a Nerd in 2014, she worked as a tax accountant and freelance personal finance writer. Erin’s work has been cited by The New York Times, CNBC, the “Today” show, Forbes and elsewhere. In her spare time, Erin reads voraciously and tries in vain to keep up with her two kids. She is based in Ypsilanti, Michigan.
Updated Oct 21, 2021 11:31 a.m. PDT
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here’s how we make money.
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Even if you love your credit card, you probably shouldn’t get too attached to the 15 or 16 digits emblazoned on it. If your card — or your card data — is ever lost, stolen or compromised, you’ll probably get a new card with a new number on it. That keeps the old card number from being used fraudulently.
However, a new card number is not the same as a new card account , so the new number in itself shouldn’t affect your credit score. But the downstream effects of the new number could cause you trouble if you’re not careful.
No direct credit score effect
When your issuer needs to change your credit card number, they’ll send you a replacement card with a new number. It’s linked to the same account you’ve been using all along. Nothing on your credit report will change in any way that would affect your score:
There’s no credit check.
The old card isn’t reported as a closed account.
The replacement card isn’t reported as a new account.
The age of the account, its payment history and all other pertinent data apply to the new card just like the old one.
So getting a new card number won’t hurt your score. But .
If your card is changing from one issuer to another, there’s a chance that your credit score could be impacted. For example, when the Costco Anywhere Visa® Card by Citi moved from AmEx to Citi, some cardholders saw a temporary drop in their score. In some cases the old issuer could report the account “closed” before the updated account has been added to cardholders’ credit reports by the new issuer. As such, scores could drop for some cardholders — albeit temporarily.
Remember automatic payments
Keep in mind that any bills that you’d set up to automatically pay with your credit card — subscriptions, gym memberships and so on — may continue to be charged to the old number. Since that number has been canceled, the payments will be rejected, and you could get hit with penalties, late fees, account cancellations and other hassles from those merchants. Your power or water could be shut off if the utility doesn’t get its payment. If an unpaid bill goes to collections, it could even wind up on your credit report and hurt your score.
To avoid this, log in to each account with automatic payments and change them over to your new number. Keep in mind that some automatic payments take one or two billing cycles to process, so you may have to make a couple payments manually. Otherwise you’d risk a late fee.
Related, any merchant that stores your credit card information for use whenever you make a purchase — Amazon, for example — will still have the old number, and you’ll need to update your info there, too.
Does applying for a new credit card hurt your credit?
Ethan Steinberg has been a frequent flier for as long as he can remember. He went from studying abroad in Paris to moving to Shanghai after graduating college, where he covered all things travel in the Asia-Pacific region for TPG.
April 12, 2023
6 min read
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The idea of earning free flights and hotel stays just by signing up for the right credit cards seems too good to be true, and there are plenty of myths about how it all works. When introducing someone to the world of reward travel, you may have to dispel some of those misconceptions.
One of the most common things people believe when they apply for new credit cards is that those actions will negatively and permanently impact their credit scores. While it is true that recklessly opening new lines of credit and abusing them (i.e., racking up large balances, carrying interest and missing payments) can hurt your credit score, there is no long-term impact on your score from simply opening new accounts.
Since credit card sign-up bonuses are the foundation of travel rewards, today we’ll look at how your credit score is affected when you open a new credit card.
How does applying for a credit card impact your credit score?
Even if you’ve researched and decided which card to start with, you should not apply for it until you understand how your credit score is calculated.
Here’s a breakdown of the factors involved:
- Payment history (35%): It’s no surprise that the category that carries the most weight is your on-time payment history.
- Amounts owed (30%): Also referred to as the utilization rate, this is the total balance on all your credit cards divided by your total credit limit.
- Length of credit history (15%): Also known as the average age of accounts, your credit history will result in a higher score the longer it is.
- Credit mix (10%): This refers to the various lines of credit you may have, including credit cards, student loans, a car loan and a mortgage.
- New credit (10%): New inquiries on your credit report account for 10% of your score.
How can applying for a credit card hurt your credit score?
Hard inquiries vs. soft inquiries
Your credit will likely be checked dozens of times throughout your life, whether you’re applying for a credit card or starting a new job. There are two different types of inquiries, and it’s important to understand the difference.
Hard inquiries are times when your credit is checked in connection with an application for a new line of credit, such as a credit card or loan. These inquiries get reported to the credit bureaus and are the ones that appear on your credit report — and ultimately affect your score.
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A soft inquiry would be if you checked your own credit report (to figure out if you were under 5/24 with Chase, for example) or let your employer check your credit as part of the hiring process. Soft inquiries do not get reported to the credit bureaus and won’t impact your score in any way.
How do hard inquiries affect your credit score?
Almost every time you apply for a credit card, you will receive a hard inquiry on your credit report. There are some exceptions, such as the fact that American Express often won’t inquire about existing customers until the new application is approved. While the exact impact may vary from case to case, generally speaking, you can expect your score to drop by about five points each time you apply for a new credit card.
This might seem scary if you’ve been working to improve your credit score for a long time, but it’s important to remember that the exact number is rarely what banks look at when evaluating your application. They’ll put you into a range, say, 700-750 — so if your score drops from 740 to 735, it is unlikely to have any real effect on future approval odds.
Having too many recent hard inquiries can drag down your score. Credit Karma says that your score starts to be impacted with three to four recent inquiries, but especially once you get above five. The inquiry will stay on your credit report for up to two years, but the impact fades over time. If you see a jump in your credit score one month that’s not linked to any obvious event, such as paying off a balance, it may be the effect of your inquiries fading in relevance.
How can applying for a credit card help your credit score?
While the hard inquiry might lower your credit score in the short term, opening a new credit line can help you increase your credit score in the long run. It provides you with another opportunity to pay your bills in full and on time, which will help your payment history as it’s calculated into your credit score. It also increases your available credit, meaning you can more easily keep your credit utilization rate low.
Plus, if you leave the credit line open, you can increase the length of your credit history over time. As long as you use the new credit card responsibly and follow our 10 commandments of credit card rewards, the new card can ultimately help your credit score.
Bottom line
A crucial step in becoming comfortable applying for credit cards is learning about the factors that affect your credit score and knowing that the impact on your score from an application is minimal. A five-point drop is a small price to pay if it helps you unlock a sign-up bonus worth $1,000 or more in free travel.
Remember that the drop is only temporary. Not only will the effect of the inquiry fade over the course of two years, but in the long term, you can also boost your score by continuing your history of on-time payments and increasing the average age of your credit accounts.
Additional reporting by Emily Thompson and Benét J. Wilson.
Featured image by MORSA IMAGES/GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
How your credit card affects your credit score
Your credit card doesn’t just help you access funds when you need – it also contributes to your credit score which is a number generated by credit reporting bodies and gives an insight into the way you use credit.
Your credit score can also be used by credit providers to assess your credit worthiness when you apply for a consumer credit loan such as a personal loan, home loan or car loan.
- What is a credit score?
- Why is a good credit score important?
- How is your credit score calculated?
What is a credit score?
A credit score is one indicator of your overall credit health and is a number assigned to you by a credit reporting body. It is a summary of what’s on your credit report and an indicator of your credit worthiness. Most credit scores are out of 1000 and the higher the score the better your credit health is.
Credit providers may use their internal scores and/or the credit reporting bodies’ scores to determine the credit decision and amount of credit offered to you at the time of your application.
Your credit card may only be part of the credit health equation, but it’s still a good idea to learn how your card affects your overall score
Why is a good credit score important?
When considering whether to lend you money – for a car, a home or something else – banks and other organisations want to know you’re responsible with credit and will be able to pay your loan back on time. For this reason, they may look at your credit report and credit score to help decide whether to approve your loan and how much to lend to you. That’s why it’s important to make sure your credit score is as favorable as possible.
How is your credit score calculated?
When it comes to your credit card, the kind of activity that affects your credit score includes your:
- repayment behaviour: your ability to make repayments on time and consistently pay your debt down will be reflected in your credit score. You may like to set up an automatic payment to take the hassle out of remembering to pay on time.
- credit applications and accounts: The number of credit applications, the amount of credit and the number of credit products you hold affect your credit score. Remember to apply for and open new credit accounts only when needed
- other types of credit: as well as your credit card, your credit score is affected by any other loans you have such as personal loans, car loans and home loans. Being able to demonstrate you manage other debts responsibly could help your credit score.
Your credit score will change over time depending on your behaviour. So even if you’ve been a little less than diligent with debt in the past, it’s never too late to try and improve your habits… and your score.
You can request a free credit report once a year from each credit reporting body and check what’s on your file. The credit reporting bodies Westpac Group reports to are Equifax, illion and Experian. Visit CreditSmart.org.au for more information and to request your free report.
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- Which credit card for travel?
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