“The Benefits of Using a Credit Card Lock”

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Why Locking a Credit Card Won’t Hurt Your Credit

Locking your credit card prevents unauthorized use, which is particularly useful if your card is lost or stolen. This action does not negatively impact your credit score because it is not reported to credit bureaus. Your credit report reflects your history of managing debt, and a card lock is simply a security measure.

When you lock your credit card, recurring bills and previously authorized charges will still go through. If you find your card, you can unlock it and continue using it. If not, you can request a replacement from your card issuer.

Credit Card Actions That Can Impact Your Score

While locking your credit card doesn’t affect your credit score, other actions do. Here are some key points to consider:

• Making late payments: Missing payments can severely damage your credit score. Payment history accounts for 35% of your FICO® Score.
• Running up a balance: High balances negatively impact your credit utilization ratio, which makes up 30% of your credit score. Keeping a low ratio is beneficial.
• Closing a card: Closing a credit card can increase your credit utilization ratio and reduce the length of your credit history, which accounts for 15% of your FICO® Score.
• Defaulting on your credit card: Missing several payments can lead to your account being charged off and sold to a collection agency, which remains on your credit report for seven years.

How to Use a Card Lock Strategically

Locking your credit card is easy and can be done through your online account or mobile app. Here are some scenarios where a card lock can be beneficial:

• Handle a misplaced or stolen card: Locking your card gives you peace of mind while you search for it.
• Prevent credit card fraud: Lock your card immediately if you suspect your account has been compromised.
• Control spending: A card lock can help you resist impulse purchases and manage credit card debt.
• Manage an older credit card: Keep an older card open to maintain its long history on your credit report. Locking it can prevent new charges while keeping the account active.

The Bottom Line

Credit card locks are a valuable tool for preventing unauthorized use and managing your spending. While locking your card doesn’t hurt your credit, other actions like high debt balances and missed payments can. For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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