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Does Opening Or Closing A Bank Account Affect Your Credit Score?

- Aug 23, 2022 credit, Credit Maintenance0 comments

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 credit scores 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.

The soft credit pulls

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 whether they want to do business with you or not. This is true especially for bank accounts that offer overdraft protection etc.

A soft credit pull is never shown by the credit bureaus to anyone 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.

The ChexSystems report

When you open a bank account, the banks will usually check your ChexSystems report which shows details about your past activity regarding overdrafts in your checking accounts, bounced checks, etc. The Checksystem report will show how many bank accounts you opened. But the Checksystem report has nothing to do with credit. It’s a totally different report that does not help or damage your credit score in any way.

To sum it up

In conclusion, you can feel free to open and close as many bank accounts as you’d like. It will not hurt your credit score in any way. 

Frequently asked questions
Does it affect my credit if my report shows multiple closed accounts?
Closed accounts don't directly hurt your score. However, it can indirectly hurt your score if you closed your oldest credit card and lost credit history
How long does it take for a new credit card to show up on my credit report?
It can take up to 30 days
What does it mean when it says that the account was "closed by credit grantor" on my credit report?
That your credit card was shut down by the bank. But this note does not affect your credit score in any way

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Sam Sam has nearly a decade's worth of experience educating his many readers on everything credit. Sam spends his days checking out credit cards for a full report, from the minute benefit details to the shebang of welcome bonuses. Plus studying the ins and outs of building proper credit. It’s his favorite pastime and he loves sharing it with others.

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