Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!
Does Returning Items Affect Your Credit Score?
July 1, 2025
Quick Answers
Returning a purchased item to a retailer does not directly impact your credit score, as this transaction is not reported to the major credit bureaus.
When you return an item bought on a credit card, the refund lowers your statement balance, which can improve your credit utilization ratio and potentially benefit your score.
While the return itself is neutral, any resulting payment disputes or late fees on your credit card account due to an unprocessed refund can negatively affect your credit history.
What Is Returning an Item?
Returning an item is the process where a consumer takes a previously purchased product back to the retailer. This action typically results in a refund to the original payment method, an equivalent amount in store credit, or an exchange for another item. While it's a standard part of the shopping experience, the financial mechanics behind a return can extend beyond the store's counter.
When you return an item that was purchased with a credit card, the merchant issues a credit back to your account. This refund lowers your outstanding balance, which directly impacts your credit utilization ratio—the amount of credit you're using compared to your total limit. A lower credit utilization ratio is generally viewed favorably by credit scoring models, potentially leading to an improvement in your credit score.
How Returning Items Could Affect Your Credit Score
Returning a purchase won't directly ding your credit score. However, the timing of the purchase and refund can indirectly influence key factors, like your credit utilization ratio, that do matter.
- The Large Purchase: It begins when you make a significant purchase on your credit card, which substantially increases your outstanding balance and pushes you closer to your credit limit.
- The Utilization Spike: This new, higher balance can raise your credit utilization ratio—the percentage of your available credit you're using. A ratio above 30% can negatively impact your score.
- The Reporting Cycle: Your card issuer reports your balance to credit bureaus once per statement cycle. If you haven't returned the item before this date, the high balance gets reported.
- The Delayed Refund: Although the refund eventually lowers your balance, the high utilization has already been recorded for that cycle. This can cause a temporary dip in your score until the next report shows the lower balance.
How Much Will Returning Items Affect Your Credit Score?
The impact of a return on your credit score isn't always direct, but several factors can lead to indirect consequences. Here are a few key things to consider when you make a return.
- Direct vs. Indirect Impact The act of returning a product itself does not directly affect your credit score. However, related actions, like how a refund is processed to a credit card, can have an indirect influence on your credit.
- Credit Card Balances If a refund isn't processed before your statement date, your balance will appear higher. This can temporarily increase your credit utilization ratio, a key factor that influences your overall credit score.
- "Buy Now, Pay Later" Services Returns made on purchases using BNPL services can be complex. A delayed refund could cause a missed payment on your installment plan, potentially impacting your credit if the lender reports it to the bureaus.
How You Can Avoid Returning Items Affecting Your Credit Score
Set Up Overdraft Protection
Consider enrolling in your bank's overdraft protection program. This service links your checking account to a savings account or a line of credit, automatically transferring funds to cover transactions if your balance is too low. This prevents the item from being returned in the first place.
Monitor Your Account Balance
Regularly checking your account balance is a crucial preventative measure. Use mobile banking apps and set up low-balance alerts to stay informed about your available funds. This awareness helps you avoid spending more than you have and prevents returned items due to insufficient funds.
Maintain a Financial Buffer
Keeping a consistent cushion of extra money in your checking account can help you avoid accidental overdrafts. This buffer provides a safety net for unexpected debits or minor miscalculations in your budget, ensuring transactions clear without issue and protecting your financial standing.
Ways to Improve Your Credit Score
Improving your credit score is always possible with consistent effort and the right strategies. While it takes time, following proven methods can lead to meaningful improvements in your creditworthiness and financial health.
- Make timely payments. Since payment history is the most significant factor in your score, setting up automatic payments or reminders is crucial to ensure you never miss a due date.
- Reduce your credit utilization. Aim to keep your credit card balances below 30% of your total credit limit, as this ratio heavily influences your score.
- Monitor your credit reports. Regularly check your reports from Experian, TransUnion, and Equifax for errors and dispute any inaccuracies you find.
- Diversify your credit mix. Lenders like to see that you can responsibly handle different types of credit, such as a mix of credit cards and installment loans.
- Limit hard inquiries. Avoid applying for too much new credit in a short period, as each application can temporarily lower your score.
The Bottom Line
Returning purchased items typically does not affect your credit score. Your credit is influenced by how you manage the account used for the purchase, not by the return itself.
Frequently Asked Questions
Can returning an item I bought on a credit card hurt my score?
No, a simple return does not directly impact your credit score. The refund can, however, increase your credit utilization ratio, which may cause a minor, temporary dip.
What if a return results in a negative balance on my credit card?
A negative balance from a return will not harm your credit score. You can either spend the credit or simply request a refund check from your issuer.
Do returns with "buy now, pay later" (BNPL) services affect my credit?
It depends on the service. While the return itself won't hurt your score, some BNPL providers do report payment history, so missed payments can have an impact.
Supercharge Your Credit Cards
Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.
Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
