On Oct. 11, 2019, Walmart’s massive credit card portfolio is due to transition from Synchrony to Capital One. And for existing Walmart cardholders, this major switch raises a big question: Will changing issuers affect my credit?
The short answer: Probably not, because of credit reporting conventions that issuers follow.
“A transition of account ownership does not typically have a significant impact on a person’s credit history or credit scores if any at all,” Rod Griffin, director of consumer education and awareness at Experian, one of the three big credit bureaus, said via email.
While Capital One and Synchrony both declined to comment directly on whether cardholders’ credit scores would be affected in the change, here’s what to know about these types of transitions, along with what the issuers did say.
Not considered ‘an application for credit’
When Walmart credit cards transition from Synchrony to Capital One, existing cardholders will get a new card and new rewards — but they won’t have to apply for it and it won’t be treated like a new account.
That’s good news if you’re shopping for a mortgage or auto loan, for example, and trying to avoid dips in your credit scores. When you apply for credit and issuers pull your credit reports in the course of making a decision, it generally triggers a hard inquiry, which can temporarily ding your credit scores.
But in cases like these, where you’re not actively opting in for changes, you shouldn’t get hit with a hard inquiry.
“The transition of the account to Capital One will not be considered an application for credit,” Daniel Mouadeb, senior vice president and head of the Walmart partnership at Capital One, said in an email when asked when if the transition would trigger a hard inquiry.
Two entries, same open date
When Walmart cardholders look at their credit reports after the switch, they can expect it to be a bit longer than before.
“There will be two tradelines on the credit report — the old Synchrony account and the new Capital One account,” Lisa Lanspery, senior vice president of public relations at Synchrony, said in an email. A tradeline is a credit account reported to credit bureaus that includes details about your payment history.
Although the new Capital One Walmart credit card will show up on your credit report as a separate tradeline, the information about when your account was opened will be reported with the same date provided by the previous issuer, Capital One confirms.
For example, if you opened your Walmart credit card in January 2017, the new Capital One tradeline on your credit report would also show that you opened the account at that time. That’s reassuring for longtime cardholders concerned about losing their card’s history in the transition. Length of credit history is among the major factors that determine your credit scores.
It’s also in line with credit-reporting conventions. Under the current reporting format, issuers are required to report accounts that have been purchased with the same “open date” and payment history as reported by the former lender, assuming the old issuer converts cardholders’ account history to the new issuer’s system. Additionally, the previous issuer is required to report such an account as sold.
In such transitions, “the average age of accounts would likely not change,” Griffin of Experian says.
Where to look for help
When a big credit card portfolio moves from one issuer to another, the transition can be incredibly complicated. There’s a chance you might run into some hiccups — or perhaps something about how your account is reported just doesn’t make sense to you. But when two issuers are involved, which one should you turn to for help? It depends.
“Cardholders should contact the institution who reported the credit data,” Mouadeb said via email. “For information about the Capital One account on their credit file, they should contact Capital One.”
Likewise, “any questions relative to account reporting prior to the transfer will be handled by Synchrony,” Lanspery of Synchrony said in an email.
Keep in mind that during the first few days of a big transition, customer service lines might be overwhelmed. Unless your question is urgent, consider calling at a later time; you might be able to get a faster answer.
NerdWallet staff writer Kimberly Palmer contributed to this article.