credit cards

New credit card firm won't drag down score

Leslie McFaddenQuestionDear Credit Card Adviser,
If my credit card company transfers my account to another company in a merger and sends me a "new" card with a different card number, is this considered a new account on my credit report?

Also, do I lose the history of the previous card?
-- Scott

AnswerDear Scott,
You shouldn't lose the payment history of your old credit card. However, you may or may not have a new entry on your credit report.

In an email, Experian spokesman Rod Griffin wrote, "The lender determines how the account will be reported when it acquires another lender and assumes ownership of the debt."

He says the new lender may do one of several options:

  • Delete the old account and replace it with a new credit card account, carrying over the previous history.
  • Leave the old account as it is and not add a new account while the acquisition process is underway.
  • Report the previous account as closed and transferred, and open a new credit card account that would reflect the payment history going forward.

These account updates should have a neutral impact on your credit score. Provided the credit limit on the new account is the same and you continue to pay on time, this change in account information would not impact one's credit score, Equifax spokeswoman Demitra Wilson said via email.

"If the credit limit of the account is changed, the consumer's score may be impacted because their debt-to-available-credit ratio would also change," she said. This ratio is part of a factor worth about 30 percent of your FICO credit score, a score commonly used by lenders.

If you want to make sure the accounts are reporting correctly, check your credit report. You can request a free copy at AnnualCreditReport.com from each of the three major credit bureaus once every 12 months under federal law.

If you don't think the accounts were updated properly, file a dispute through the agency from which you ordered the report. You can initiate a dispute online, over the phone or via postal mail using the contact information on your credit report. Disputing information doesn't cost money or hurt your credit score.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of the Credit Card Adviser, go to the "Ask the Experts" page and select "Credit Cards." Read more columns by the Credit Card Adviser. Follow Leslie McFadden on Twitter.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 15.73%  0.02 15.75%
Cash Back Cards 16.43%  0.02 16.45%
Low Interest Cards 10.98%  0.02 10.96%
 
Search
advertisement
CARDS WEEKLY NEWSLETTER
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

advertisement

Credit Card Blog

Jeanine Skowronski

Data breach alert: Staples

The office supply retailer is investigating a possible credit card data breach.  ... Read more

Partner Center
advertisement

Connect with us