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Home » Banks, Credit

Does Closing a Savings or Checking Account Hurt your Credit Score?

Last updated by on 7 Comments

Ever wonder what type of accounts do and do not impact your credit score and history?

A reader writes in with a good question on closing a checking account and I thought I’d share the answer, to provide some insight:

“G.E., I have an older checking account that I want to close. Will closing a checking account hurt my credit score or credit history in any way? Are there any other possible negatives to doing this?”

The short answer is NO (so is the long… but let me explain why…).

Credit reports and credit scores are out there as a means for lenders to determine if you are credit worthy based on your past and current borrowing and payment history.

Savings and checking accounts, on the other hand, are both assets that you own. As such, they have no impact on your credit (what you borrow). So they won’t show up on your credit reports and your credit score will not be negatively impacted by shutting them down.

closing checking account credit score

The only time your checking account may come in to play in a lending situation is if a lender asks you to prove your assets. I have had this happen when taking out a mortgage. Sometimes lenders like to see that you actually have liquid cash somewhere that you can tap, if needed, to pay them back. But closing a savings or checking an account would still have no impact on your credit score, whatsoever.

I have heard of banks flagging customers for abuse of closing and opening checking accounts to score free promotions. So that might be your only downside. Who would do such a thing? ;-)

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I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


7 Comments »
  • Even if a lender wanted to see your savings, which they always do, that’s why you provide your own bank statements as opposed to letting the bank report on it for you.

  • Warren says:

    Sometimes a checking account will have a “checking reserve” or other feature that will honor a check if there is insufficient funds. This makes the checking account also a loan account and will show up on a credit report.

  • George P Burdell says:

    I used to work for Equifax. Closing a checking account will not affect your score. Closing a credit card account can though as it lowers you’re available credit. Also, you may get a 2nd ding if that account is your oldest on file and nothing else as old.

    Closing checking/savings accounts may not hurt you score, but opening new ones might. If you apply for a new account and the bank does a hard inquiry on your credit file that will lower your score.

    • What are your thoughts on an old card that no longer carries any balances? If the credit card company is kind enough to not automatically close it for you, does it help/hurt a credit score? I’ve read at some places that it is best to carry a small balance on all cards. I’m thinking this is so it isn’t closed for inactivity?

      Anywho, thanks for debunking the myths of closing savings/checking accounts!

      @YPMoney

    • Allie says:

      It lowers you are available credit?

  • Kathryn says:

    I am a signer on a business checking account. If the owner and I close our checking account, will anything at all show on my credit report or any other investigations that could be conducted? I am only the signer on the account; the main account is under my bosses social security #.

    Thanks so much!

  • Laura says:

    I see you took a reader’s question here. How do we ask other questions? I don’t see an email or contact page.

    Thanks!

    If your interested, my question is: If you are putting money away with each paycheck to save for a vacation or save for a charitable donation, where should you be putting that money. My husband and I plan to put away $300 a month so that in 1.5-2 years we can take a big international vacation. And we are also putting away $150 a month for a donation we’d like to make at an annual gala. Where should we put that money until we need it? In checking? That seems like a lot of money to have lying around in a checking account. Your thoughts?

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