Does a bank account affect your credit score?

Your bank account is not on your credit report

Checking and savings accounts are invisible to your credit score. Experian says banks and credit unions don't send deposit account information to Experian, TransUnion or Equifax, closures included, so an ordinary account opening or closure generally is not listed as a credit account. The CFPB says the same of the big three: they typically do not include your checking account or check-writing history.

That has a consequence people find strange. Your balance never counts. Someone with $40,000 in savings can sit at 580, and someone who runs the account close to zero every month can reach 800, because a credit score measures how you handle borrowed money and nothing else. An ordinary debit card spends your own funds; it does not build a credit account through repayment. A product marketed as a credit-building debit card may work differently, so check its terms.

An ordinary account opening or closure generally does not move the number directly. Ask about any credit inquiry or linked overdraft credit product before applying. An unpaid debt or a loan payment missed during a switch can also reach your credit file.

The file that does track your bank accounts

There is a second set of reports that most people never hear about until a bank turns them down. Checking account screening companies, mainly ChexSystems and Early Warning Services, collect negative information about how you handled past accounts and sell it to banks deciding whether to open a new one. The CFPB says that when you apply for a checking or savings account, the bank will usually request one of these reports. If the company has nothing negative on you, you typically have no report at all.

What lands there, per the CFPB: an unpaid negative balance, such as an overdraft, on an account the bank then closed (an "involuntary closure"); suspected fraud; or a joint account with someone who had those problems. The OCC, which supervises national banks, says negative information generally stays on ChexSystems and Early Warning reports for five years.

These companies are consumer reporting agencies under the Fair Credit Reporting Act, which names check-writing history as one kind of nationwide specialty file. That gives you the same core rights as with a credit report: a free copy every 12 months on request, a free copy when a bank denies you an account based on one (the denial notice must name the company), and the right to dispute errors with both the screening company and the bank that reported them.

When an overdraft does reach your credit report

The bridge is a collection account. If you leave an account overdrawn and don't pay it, the bank can close it and send the debt to a collection agency. Experian says the agency may choose to report that collection to the credit bureaus, with a significant negative effect on your score. The ordinary deposit account is generally not listed as a credit account; the collection does, as a debt.

Once it is there, the clock is set by law, not by the collector. The FCRA lets an accurate collection be reported for seven years, counted from 180 days after the delinquency that led to it began. Paying it does not take it off early. Experian notes that newer models may ignore paid collections, and myFICO confirms FICO Score 9 does. But FICO Score 9 is not the version most lenders pull: myFICO gives that title to FICO Score 8.

The blunt version: a negative balance at a bank you are leaving is the most expensive small debt you can have. It can put you in ChexSystems for years and on your credit report for seven, often over a small sum. Pay it before you close anything, and if a bank already sent one to collections, read what can and cannot be removed before you deal with the collector.

Closing an account without a surprise

The other way a bank account hurts your credit is indirect, and it catches careful people. If your car loan, card or student loan pays itself from the account you close, the next payment simply fails. Experian warns that a payment 30 or more days late can have a severe effect, and payment history is 35% of a FICO Score. The account closure is harmless; the loan payment that bounced off it is not.

1. Open the new account first and confirm it works.
2. Move every automatic payment and direct deposit, then wait at least one full billing cycle so you see each payment clear from the new account.
3. Bring the old account to exactly zero, with no pending fees or overdrafts.
4. Get the closure in writing and watch the old account for a few months for stray charges.

If a late payment does get reported because of a botched switch, call the lender at once. A goodwill adjustment is a favor some lenders grant, not a right, and an accurate late payment can stay up to seven years. The late payments guide explains what is and is not disputable.

Opening an account, and the one way it can help

For a new checking or savings account, the check that usually decides it is the screening report, not your credit score. If you are about to apply for a mortgage or car loan and want no new inquiries on your file, ask the bank before you open anything whether it will pull your credit report at all, and if it will, whether that pull counts as an application.

The one route by which bank data can raise a score is opt-in. Experian Boost lets you connect the bank accounts you pay bills from, so it can find on-time payments for things like your phone, utilities, rent and insurance and add them to your Experian file. Experian itself points out the limits: not every lender uses Experian's report, and not every lender uses scores that read Boost data. It can help a thin file; it does little for a long one.

If your score dropped around the time you changed banks, the bank is almost never the reason. Look for a payment that failed in the switch, or read why your credit score dropped for the usual causes.