Skip to content
ScoreSense
  • Available Features
    • Credit Scores & Reports
    • Credit Insights
    • Credit Monitoring
    • Identity Theft Monitoring
    • Credit Tools
    • Mobile App
  • Blog
  • In The News
  • Credit Journeys
    • College
    • Military
    • Home Buying
  • Contact
  • FAQs
  • Reviews
  •   Sign In
  • Get My Scores
Main Menu
  • Credit Education
    • Credit Basics
      • Credit Bureaus
      • Types of Credit
    • Credit Scores
      • Credit Score Factors
      • Credit Score Tips
    • Credit Reports
      • Negative Credit Items
      • Credit Report Errors
      • Credit Report Disputes
    • Credit Monitoring
      • Signs of Credit Fraud
      • Credit Fraud Recovery
      • Credit Security Tactics
    • Credit Repair
      • Credit Repair Scams
    • Build Credit
      • Establish Credit for Teens & Students
    • News & Trends
  • Fraud
    • Identity Protection
    • ID Theft
      • Child ID Theft
      • Tax ID Theft
      • Medical ID Theft
    • ID Theft Recovery
    • Data Breaches
    • News & Trends
  • Personal Finance
    • Loans
      • Home Loans
      • Auto Loans
      • Student Loans
      • Personal Loans
      • Business Loans
    • Budgeting
    • Saving
    • Debt
    • Banking
    • Investing
      • 401K & IRAs
      • Stocks & Mutual Funds
    • Taxes
    • Life Events
      • Marriage
      • Parenthood
      • Retirement
      • Divorce
      • Death
      • Bankruptcy
      • Job Loss
      • Natural Disaster
    • News & Trends
  • Credit Cards
    • Interest Rates
    • Denied Credit
    • Card Types
    • Manage Balance
    • News & Trends
  • Credit Tools
    • Credit
      • Monitoring & Alerts
      • Credit Scores & Reports
      • Credit Insights
      • Credit Specialists
      • Score Simulators
    • Identity Theft Insurance
    • Identity Theft Monitoring
    • Sex Offender Monitoring
  • COVID-19
Search

CreditSense > Credit Education > Credit Scores > Credit Score Factors > Does Closing a Checking Account Affect Your Credit?

Does Closing a Checking Account Affect Your Credit?

Picture of ScoreSense

ScoreSense

  • April 5, 2020

It’s perfectly logical to open a new account when you find a better deal at a competitor bank. You might also need to open a new account if you move to a new city where your current bank doesn’t do business. Generally, you can close your bank account whenever you want. But before you act, think about whether your account is healthy and without issue. Make sure your account doesn’t have any blemishes that might reflect in your banking history.

Does Personal Banking Activity Impact Your Credit Scores?

Your bank account activity doesn’t appear in your credit history, so it won’t impact your credit score under normal circumstances. Only your borrowing activity, seriously past-due credit accounts and public records entries like judgments impact your credit score. Your banking activity won’t appear on your credit report even if you have a lot of money saved up and transact daily. But, your bank account does need to be in good standing to stay off your credit history.

If you’re wondering whether your banking debit card with a Visa or MasterCard logo impacts your credit score, the answer is also no. Debit card transactions aren’t paid with borrowed funds, but with money that’s already been deposited in your account. This means that while personal banking does not impact your credit report, it does have an impact on other reporting agencies, specifically ChexSystems.

Bank Accounts Listed in ChexSystems

Like credit card companies or other lenders, banks want to know if you make a good customer or prove a potential risk. Lenders rely on Equifax, Experian, and TransUnion to gauge your creditworthiness. To track banking history, banks often use a database called ChexSystems. The types of information banks report to ChexSystems about a consumer includes:

  • Bank account and ATM card abuse
  • Excessive overdrafts
  • Unpaid negative balances
  • Fraud such as identity theft
  • Excessive bank account applications
  • Involuntary closures based on delinquent behavior

You might have a negative report in ChexSystems if you have issues with your bank account and haven’t handled them in a timely manner. ChexSystems infractions stay on your banking history for five years.

Before closing your account, request a report from ChexSystems if you’re unsure about your banking history. Review your report for any errors and use the company’s dispute resolution options — online, phone, mail or fax — to have any errors removed.

Pay off your debts and ask ChexSystems to update your report. Once ChexSystems updates your report, you’ll be able to start over with a new account.

Overdraft Protection and Your Credit Report

When opening a checking account, some banks may offer you overdraft protection.

Overdraft protection helps you avoid hassles like:

  • Declined debit card transactions
  • Bounced checks
  • Late bill payments

While overdraft protection is simply a way for banks to protect you from bouncing a check, the manner in which the bank provides that protection can vary between institutions. Some banks, for example, will market overdraft protection in the form of a line of credit. Just like any line of credit, the money is available when you need it, but spending it can carry some risks and penalties.

Before taking advantage of overdraft protection, ask customer service at your bank to explain details about how the account should be used. Also, find out whether the bank reports overdraft protection accounts to the credit bureaus.

Aim to control your overdraft protection usage just like you do with your other credit cards. This is because your bank will report any overuse or repayment issues to the credit bureaus or ChexSystems, or both. When you close your bank account, confirm that your overdraft protection line of credit is paid in full.

Simple Steps to Closing Your Bank Account

Closing your current bank account begins with opening a new one, or having another checking account you will transfer to from your current bank account. A seamless transition to your new account ensures that you maintain a good ChexSystems history. Once your new account is open, follow these steps to close down your old account.

  • Transfer funds to your new account. Having funds in your new account ensures you can pay your loans and credit cards before the due date, a requirement to keep your credit scores high. Once funds are transferred to your new account, you can conduct daily transactions without worrying about overdrafts.
  • Update your direct deposit information with your employer. Make sure your employer has all your new bank account details and that your next paycheck deposits in your new account, before eliminating your old one.
  • Update recurring and automatic payments. Some of your recurring and automatic payments may report to the credit bureaus. To avoid hiccups, login to your accounts and change your banking information for a seamless transition.
  • Ask for confirmation of account closure in writing. The confirmation gives you peace of mind that the account is closed, which is important if the account has a line of credit attached to it.

Closing Your Account Doesn’t Affect Credit

Closing your bank account isn’t going to have an impact on your credit. However, closing your bank account without taking care of other accessory issues, like paying off overdraft protection fees, may have such an impact. And, there are other databases out there, like ChexSystems, that have an effect on your banking if not your credit.

Your best bet is to develop good banking habits so that if you need to close an account, all the extra issues that could have an effect simply won’t.

Smart Moves

Get your credit scores and reports from all three bureaus instantly.

Take Action

Shield your credit and finances with up to $1 million identity theft insurance*.

Get Protected

Find out how your score could change if you pay down a credit card or miss a mortgage payment.

Explore Tools

RELATED

How to Defer Your Mortgage During the Coronavirus Pandemic

Will Losing My Job Because of the Coronavirus Hurt My Credit Score?

How to Tighten Your Budget During the Coronavirus Lockdown

What Should I Do If My Information Is Part of a Data Breach?

Tax Season is High Risk

Why Are My 3 Credit Scores Different?

6 Ways to Spend Less This Holiday Season

What is a Write-off and How is it Different From a Charge-off

You are more than just 1 credit score.
Get your credit scores and reports from all three bureaus instantly.
Get My Scores

What's Your Credit Score?

Get Your credit scores & reports from all 3 bureaus, Instantly!**
Get my scores

Sign Up for Our Credit Newsletter

ScoreSense

  • Have an Account? Sign In
  • 1-800-972-7204
  • Mon-Fri: 8AM to 8PM CT
    Sat: 8AM to 5PM CT
    Sun: Noon to 6PM CT
  • customercare@scoresense.com
  • 3400 N Central Expy Ste #110-298
    Richardson, TX 75080

Company

Contact Us
Terms and Conditions
Privacy Policy
OTL*ScoreSense

 

Facebook Youtube

Features

Credit Scores & Reports
Credit Insights
Credit Monitoring
Identity Theft Monitoring
Credit Tools

Resources

Learn About Credit
What is a Good Credit Score?
Credit Score Range

Mobile Apps

© 2001-2025 One Technologies, LLC. All rights reserved.

ScoreSense® is a trademark of One Technologies, LLC.

Do not sell/share my information |

*Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group, Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions, and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

**After verification of your identity, your scores are available for secure online delivery in seconds.

 

Scroll to Top