Do Checking Accounts Affect Your Credit Score?
Your traditional credit report only tracks your credit and debt situation. If you have a checking or savings account at a bank, credit union or brokerage firm, the following transactions will not appear on a credit report or credit score:
- Making a deposit or withdrawal
- Writing a check
- Closing an account
- Having multiple accounts
If you have a check overdraft, it still will not appear on your report unless you do not pay the fees and the bank turns the bill over to a collection agency.
There are a few instances where a checking account could affect your traditional credit score. Some banks or credit unions may look at your credit report when you open a new account. Usually they do a “soft pull,” meaning they check your credit, but it does not affect your credit score. Some banks may do a “hard pull” or “hard inquiry,” though usually those are only used by lenders when you are requested credit or a loan. If the bank does a hard pull, it will impact your credit score for up to 12 months, usually by dropping your score by five points or fewer.
The second way a checking account may affect your credit score is if you sign up for overdraft protection on the account. Doing so sets up a new line of credit, possibly triggering a credit report inquiry and a report from the bank to the three major credit reporting bureaus. But this is not always the case—not all overdraft accounts are reported. To find out if your account may be reported, ask your bank directly.
Even if a bank doesn’t report a new checking account to the credit bureaus, it may check with ChexSystems, a consumer reporting agency for financial institutions. Banks report mishandled checking and savings accounts to ChexSystems, which in turn shares that information back to banks to help determine the risk of opening new accounts. Reports to ChexSystems stay on file for five years.