Does Locking Your Credit Card Hurt Your Credit?

Why Locking a Credit Card Won't Hurt Your Credit

Placing a lock on your credit card doesn't hurt your credit because the action isn't negative, and it isn't reported to the credit bureaus. Remember, your credit report is a record that details your history of managing debt. As such, credit card companies report your credit usage to the credit bureaus, including your balance, credit limit and payments.

Card issuers don't report credit card locks because they don't reflect how you repay debt. A credit card lock is merely a security tool to prevent new purchases on your credit card; typically, recurring bills and other previously authorized charges continue to go through.

If your credit card is lost or stolen, one of your first moves should be to lock your credit card, which you can usually do for free on the card issuer's app or website. This precaution should buy you time to search for your card without worrying that someone else will find it and use it to make unauthorized charges. If you find your missing card, you can unlock it and continue using it as usual; if you don't, you can request a replacement from the card issuer.

Learn more: Five Steps to Take if Your Credit Card Is Lost or Stolen

Credit Card Actions That Can Impact Your Score

While locking your credit doesn't directly impact your credit score, how you use your credit cards most certainly does. Here are some credit score guidelines to keep in mind when using and managing your credit card.

• Making late payments: Missing payments is the surest way to damage your credit score. That's because your payment history is the most important factor and accounts for 35% of your FICO^® Score^Θ, the score used by 90% of top lenders. Payments made 30 days or more late stay on your credit report for seven years, and even a single late payment can severely damage your credit.
• Running up a balance: Carrying high balances on your credit cards can also negatively impact your credit. Your credit utilization ratio—the percentage of your credit limit you're using—makes up 30% of your credit score. As a general rule, keeping a low credit utilization ratio is better for your credit score—the lower, the better. The top credit score achievers tend to have credit utilization ratios in the low single digits.
• Closing a card: Think twice before closing a credit card, even if you rarely use it. When you close a credit card account, you no longer have its credit limit, so your credit utilization ratio could rise. Additionally, closing an older credit account can reduce the length of your credit history, which accounts for 15% of your FICO^® Score.
• Defaulting on your credit card: Missing several payments could result in your credit card issuer charging off your account and possibly selling it to a collection agency. Both charge-offs and collections are derogatory items that remain on your credit report for seven years.

How to Use a Card Lock Strategically

Locking your credit card is a fairly straightforward process you can set up through your online account or mobile app. Here's how locking your card can help you in various scenarios:

• Handle a misplaced or stolen card: You may need a day or two to find your credit card or confirm it's gone for good. In the meantime, locking your credit card can give you peace of mind knowing that no one is racking up charges on your card while you look for it.
• Help prevent credit card fraud: Lock your credit card right away if you get a credit monitoring alert or read a news report about a data breach at your credit card company. If your account is compromised, the lock may protect it from thieves attempting to make unauthorized purchases.
• Assist in controlling spending: Credit cards are convenient tools for making purchases instantly, whether online, over the phone or in-store. But sometimes, they can be a little too convenient. If you want help limiting credit card debt or resisting impulse purchases, a credit card lock may help control your spending.
• Manage an older credit card: If you have an older credit card you're considering closing, consider leaving it open. That way, the card and its long history will remain as active on your credit report, which could bolster your credit. Locking the card could help you avoid running up a balance on the card. Just be sure to add a small, recurring payment, such as a streaming bill, that you pay off every month; that way, the card issuer will see your account is active and not close the account due to inactivity.

The Bottom Line

Credit card locks are a valuable feature to prevent others from using your credit card. You can also use them to help you manage your spending and control your credit card debt.

While locking your credit card doesn't hurt your credit, high debt balances, missed payments and other missteps could harm your score. If you're concerned about your credit, consider getting free credit monitoring from Experian. Monitoring your credit allows you to keep track of your FICO^® Score, monitor your spending and receive alerts whenever there are changes to your credit, which could help you avoid fraudulent activity.