At O1ne Mortgage, we prioritize your financial well-being and aim to provide you with the best advice to manage your credit effectively. One of the tools you can use to safeguard your finances is the credit card lock feature. This article will explore how locking your credit card can protect you from fraud, help manage your spending, and why it won’t hurt your credit score.

Why Locking a Credit Card Won’t Hurt Your Credit

Locking your credit card is a security measure that prevents unauthorized use of your card. It does not negatively impact your credit score because it is not reported to credit bureaus. Your credit report reflects your history of managing debt, including your balance, credit limit, and payments. Since a credit card lock is merely a security tool, it does not affect how you repay debt and thus does not impact your credit score.

Credit Card Actions That Can Impact Your Score

While locking your credit card doesn’t directly affect your credit score, other actions related to your credit card usage can. Here are some key points to keep in mind:

• Making late payments: Missing payments is the most significant factor that can damage your credit score. Payment history accounts for 35% of your FICO® Score. Late payments can stay on your credit report for seven years.
• Running up a balance: High balances on your credit cards can negatively impact your credit utilization ratio, which makes up 30% of your credit score. Keeping a low credit utilization ratio is better for your credit score.
• 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 result in your account being charged off and possibly sold to a collection agency, both of which 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 straightforward process that can be done through your online account or mobile app. Here are some scenarios where locking your card can be beneficial:

Handle a Misplaced or Stolen Card

If your credit card is misplaced or stolen, locking it can prevent unauthorized charges while you search for it. If you find your card, you can unlock it and continue using it as usual. If not, you can request a replacement from the card issuer.

Help Prevent Credit Card Fraud

If you receive a credit monitoring alert or hear about a data breach, locking your credit card can protect it from unauthorized purchases.

Assist in Controlling Spending

If you want to limit your credit card debt or resist impulse purchases, locking your credit card can help control your spending.

Manage an Older Credit Card

Instead of closing an older credit card, consider leaving it open and locking it to avoid running up a balance. This way, the card’s long history remains active on your credit report, which can bolster your credit. Add a small, recurring payment to keep the account active.

The Bottom Line

Credit card locks are a valuable feature to prevent unauthorized use of your credit card. They can also 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 can harm your score.

If you’re concerned about your credit, consider getting free credit monitoring to keep track of your FICO® Score, monitor your spending, and receive alerts for any changes to your credit. For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey with confidence.