After A Data Breach, Will A Replacement Credit Card Affect Your Credit Score?

You've just received a replacement credit card. Perhaps, your new credit card was the result of identity theft, fraud, or a preventative action by your bank after the Heartland Payment Systems or RBS WorldPay data breaches. The questions is: will your replacement credit card affect your credit score? Bankrate.com reported:

"This is one of those instances where an account closure likely won't affect your score at all. With lost or stolen cards or data breach situations, an issuer will usually close the old account and specify a reason, such as reported lost or stolen, and open a new account for you. As long as the new account keeps the original open date and doesn't trigger a hard inquiry, the conversion shouldn't harm your score."

Experts suggest that your new credit card account should have the same open date as your original account, so you retain your payment history. The credit limit and balance for our new card account should remain the same, too.

When a consumer normally applies for a new credit card, the credit card issuer checks the consumer's credit report to see if the consumer is a good credit risk or not. This inquiry can ding (e.g., lower slightly) the consumer's credit score when a lender interprets the closed old card account as:

"... the credit limit loss can increase your credit card use."

If your replacement credit card is an account upgrade, this could affect your credit score.

Experts advise that if the credit report inquiry is issuer-initiated, then your credit score probably won't be affected. If the credit report inquiry is customer-initiated, then it will likely affect your credit score. After you receive your replacement credit card, it's wise to check your credit report to verify that the information in your credit report is accurate.

To me, a consumer should not have to worry about this; especially if the replacement credit card was the result of a data breach at either the credit card issuer, the bank, or a transaction processing firm like Heartland. It seems to me that once again, a company's carelessness causes consumers inconvenience and more work.

There has to be a better way. The current system seems unfairly tilted towards the needs of companies over the needs of consumers.