Does Closing a Bank Account Hurt Your Credit Score

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Your credit score is a number calculated from the information in your credit report. Your credit report will contain information about your loans, other credit obligations, and negative actions in public record (bankruptcy, collections, court judgments). It actually contains absolutely no banking information so closing, or opening in most cases, a bank account does not hurt or help your score.

In some cases, your credit score might be hurt if you open a bank account. The most common case is if you open a checking account with overdraft protection. Since the bank may be giving you a short term, the overdraft protection, they may do a hard inquiry to see how credit worthy you are. If you are concerned, always ask the bank if they pull your credit and whether it’s considered a hard inquiry or soft inquiry.

So does that mean my recent rash of bank account closings will have no effect? Not necessarily. As you may remember in my post about checking your specialty reports, there is a ChexSystems report that collects information about your banking activity. Banks may see my activity, frown upon it, and deny me a bank account in the future. Is that enough to stop me from simplifying my finances? Not at all.

{ 8 comments, please add your thoughts now! }

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8 Responses to “Does Closing a Bank Account Hurt Your Credit Score”

  1. Ann-Marie says:

    Great question to address Jim. I just learned about the ChexSystems – the “black list” of bank accounts if you will – and it’s definitely not a list you want to be on! If you do find yourself on it, however, there are alternatives to a checking account. A pre-paid credit card, for example, allows you to set up bill-pay, pay for purchases electronically and use it anywhere just like a debit card.

  2. zapeta says:

    Yeah, I wouldn’t care if my credit was dinged for closing a bank account. I’ve closed two in the last 6 months and its worth it to simplify things.

    My banking history is pretty spotless, so I don’t think opening/closing a few accounts would prevent me from getting one in the future.

  3. daemondust says:

    Pages like really need to point out these specialty report companies. Most people know about the “big 3” credit reporters, but have no idea what other groups are keeping data on them until it’s used against them.

  4. eric says:

    I’ve known about Chex for years but haven’t run a report. I doubt there’s anything on it (judging from recent account openings) but I should get one regardless.

  5. Why would that do anything, especially the way people criticize banks now-a-days.

  6. Enno says:

    Thank You for writing this article. it was helpful!

  7. Robert says:

    What led me to this site. On AOL news they have a list of things that will hurt your credit score. Number one on the list, is if you close an account it immediately drops 100 points off your credit. Ok, either this site is lying or AOL is lying. I lean toward AOL lying, but I have never personally checked this out. However, my credit score is over 720 and I closed 5 accounts in the past year. Wouldn’t his make my credit score 220 now minus any dents I put in my credit by other means?

  8. aua868s says:

    was always worried that closing a bank account would impact my credit score..thanks for the insight

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