Does Switching Bank Accounts Affect Your Credit Score?

By Rebecca Lake · May 20, 2024 · 7 minute read

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Does Switching Bank Accounts Affect Your Credit Score?

Closing a checking or savings account at one bank and opening a new one at a different bank won’t affect your credit score because banks don’t check your credit or report your banking activity to the major credit reporting bureaus.

That said, there are some instances where banking activity may influence credit scores indirectly. So let’s take a look at how things play out when you are changing bank accounts.

Key Points

•   Switching bank accounts does not affect your credit score as banks do not report to credit bureaus.

•   Negative balances or overdrafts reported to ChexSystems can hinder opening new accounts.

•   Closing a credit card with the same bank may affect your credit score.

•   Banks might check your ChexSystems report instead of your credit when opening new accounts.

•   Multiple bank accounts opened do not impact your credit score as they are not reported to credit bureaus.

Will Switching Banks Be Visible on Your Credit File?

No. Your banking history is not reported to the three consumer credit bureaus (Equifax, TransUnion, and Experian), so switching banks will not be visible on your credit file.

While banks do track and report their customers’ financial activity, they report it to a different agency, which is called ChexSystems. Your ChexSystems report will include your past savings and checking account history, as opposed to your credit history. This may include negative information, such as any unpaid negative balances (from overdrafting), frequent overdraft fees, and bounced checks.

Having negative information on your ChexSystems report won’t impact your credit, but it could make it harder to open a new savings or checking account, since banks will typically pull your ChexSystems report when you apply for a new account.

Your credit reports, by contrast, contain information relating to credit accounts, including any credit cards or loans you have. It will include:

•  Personal information, such as your name, date of birth, and Social Security number

•  Credit accounts, including creditor names, account numbers, balances, and payment history

•  Credit inquiries

•  Public records and collection accounts

The information in your credit reports is used to calculate your credit scores, including your FICO® Scores. Lenders will typically check your credit scores when deciding whether to approve you for a loan or line of credit. Generally, the higher your score, the more likely you are to be approved for credit, and the better the rates and terms will be.

Does Switching Current Accounts Affect Your Credit Score?

Opening a new bank account and closing an old account does not affect your credit rating, as long as the account that’s closed is in good standing and you transfer any autopayments to your new bank account. There could potentially be credit score implications, however, if you’re shuttering the account with a negative balance, you forget to switch your autopay transactions, or you’re closing a credit card with the bank at the same time.

Here’s a closer look at three scenarios in which closing a bank account could indirectly impact your credit.

•  Negative bank account balances: The bank won’t report a negative balance due to an overdraft or unpaid fees to the credit bureaus, However, if your account has been closed because of an unpaid negative balance, it could go into collections. The collection agency could then take action against you, including reporting the delinquent debt to the credit bureaus and suing you for the balance due. Delinquencies, collection accounts, and judgments can all show up on your credit reports and harm your score.

  Missing loan or credit card payments: If you close a checking account that you were using to automatically pay credit accounts (such as your credit card, auto loan, or student loans) and don’t switch those payments to a new account, you could miss a payment. Late or missed credit card or loan payments could be reported to the credit bureaus and have a negative impact on your scores.

•  You close a credit card at the same time: If you have a credit card with the same bank and close both your bank account and credit card account simultaneously, it could negatively impact your credit. Here’s why: Closing a credit card could lower the amount of overall credit you have versus the amount of credit you’re using (your credit utilization ratio), which could impact your credit scores. Also, closing a credit card account you’ve had for a long time may impact the length of your credit history, which is another factor used to calculate credit scores.

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Will Switching Banks Affect Your Chances of Getting a Loan?

No. Switching banks should not affect your chances of getting a loan, since it won’t impact your credit scores. Closing an old bank account won’t get reported to the credit bureaus. And when you open a new bank account, the financial institution won’t likely run a credit check. Instead, the bank or credit union will screen your banking history through ChexSystems, which isn’t connected to your credit file.

Applying for a new credit card or loan, on the other hand, could impact your credit. When you apply for a new line of credit, the lender will typically run a hard inquiry or a “hard pull” on your credit file to determine how much risk you pose as a borrower. Hard inquiries show up on your credit report and can have a small negative impact on your scores in the short-term.

Can Your Credit Score Be Affected If You Open Multiple Bank Accounts?

No. Opening multiple bank accounts will not affect your credit scores. When you open a bank account, the financial institution won’t usually run a credit check but will instead screen you through ChexSystems, which is an entirely different reporting agency.

Your credit scores are based on credit accounts, such as credit cards or loans, rather than bank accounts. Things like how much money you keep in checking and savings or how many bank accounts you have don’t affect your credit rating. What does matter to your score is how good a record you have of borrowing and repaying funds in a timely fashion.

Steps That Can Positively Impact Your Credit

If you’re concerned about your credit, opening and closing bank accounts likely won’t have any effect (positive or negative), since your banking activity isn’t reported to the consumer credit bureaus. However, there are other steps you can take to add positive information to your credit reports and, in turn, help you build your credit. These include:

•  Consistently pay your bills on time. Payment history accounts for 35% of your FICO Score, so it’s a good idea to set up autopay for all of your monthly credit payments so you never miss a due date.

•  Pay down credit card balances. This can help lower your credit utilization rate, or ratio, which measures how much revolving credit you’re using relative to your total credit limits. Credit utilization accounts for up to 30% of your FICO credit score. The lower your credit utilization, generally the better.

•  Keep older credit accounts open. While it’s fine to close unused bank accounts, the same can’t be said of unused credit accounts. Closing a credit card can negatively affect your credit by reducing the amount of revolving credit available to you (instantly increasing your credit utilization rate). It also shortens your credit history, and length of credit history is also factored into your scores.

•  Review your credit reports. Inaccuracies in credit reports are uncommon but may show up from time to time, and depending on the information involved, could negatively affect your credit score. You can get copies of your credit reports free from

The Takeaway

Opening a new checking and/or savings account could be a good move if your current bank no longer meets your needs. And you can take comfort in knowing that closing an old checking or savings account and opening new ones at a different bank won’t impact your credit, since banks don’t run credit checks or report your banking activity to the consumer credit bureaus.

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Is switching banks bad for your credit?

No. Switching banks won’t impact your credit, since banks don’t run credit checks or report your activity to the consumer credit bureaus.

Is switching bank accounts a good idea?

Switching bank accounts can be a good idea if it allows you to get a better interest rate on savings (and possibly checking), reduces banking fees, and/or gives you more perks and better access to your money. Before changing banks, it’s helpful to compare features, benefits, rates, and fees to find the right banking option for your needs.

Will getting a new bank account affect my credit score?

No. Opening a new bank account and closing an old one won’t impact your credit. Banks do not report your activity to the consumer credit bureaus. Instead, they report your financial activity (like opening and closing accounts, overdrafts, and bounced checks) to ChexSystems, the banking reporting agency. Your ChexSystems report does not appear in your credit file.

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