There is a famous myth that if you open or close bank accounts often, then your credit score will drop. This is untrue, and in this post I will explain why.
What The Scoring Models Know About You
Scoring models do not know you personally. They only know the things about you which are on your credit report. There is no section on your credit report which lists the bank accounts you opened or closed.Therefore, it is impossible for this information to affect your credit score.
Soft Credit Pull
When you open a bank account, the bank may want to do a soft credit pull in order to view your credit file to determine if they want to do business with you. This is true especially for bank accounts which offer overdraft protection etc.
A soft credit pull is never shown by the credit bureaus to anyone else except to you. So again scoring models have no way of knowing how many bank accounts you have or if you open them or close them often.
In conclusion, you can feel free to open and close as many bank accounts as you’d like.
Did you know you can earn now as much as 2.25% on a savings account? Take advantage of them! You can view a great list of high earning savings accounts here.
Rather watch a video?