You’ve decided it’s time to close an old checking account. Maybe you’re simplifying your finances or switching to a bank with better perks. As you get ready to make the call, a thought pops into your head: “Wait, will this hurt my credit score?” It’s a smart question to ask, as protecting that three-digit number is so important.
The good news is, you can breathe a sigh of relief. Closing a checking account by itself does not directly impact your credit score. Credit reporting agencies like Equifax and TransUnion focus on your history with borrowed money—things like credit cards, loans, and mortgages. Your checking and savings accounts are considered deposit accounts, which aren’t typically reported to credit bureaus in a way that affects your score.
When Closing a Bank Account Could Cause Problems
While the act of closing is harmless, some indirect consequences could trip you up. The main risk involves unpaid fees. If you close your account while you still have a negative balance or outstanding fees, the bank may send that debt to a collection agency. A collection account on your credit report will significantly damage your score. Always ensure your balance is zero and all checks have cleared before you close the account.
What About Your Debit Card and Credit History?
It’s easy to mix up different types of cards. Remember, activity on your debit card and checking account doesn’t build credit history. These accounts aren’t linked to your credit report. The financial behaviors that do matter for your score—like credit card payments and loan balances—remain completely separate from your decision to close a checking account.
A Simple Checklist Before You Close Your Account
To ensure a smooth and worry-free process, follow these few steps. First, update any automatic payments or direct deposits to your new account. Give it a full billing cycle or two to make sure everything has switched over correctly. Next, double-check that your account balance is exactly zero. Finally, get written confirmation from the bank that the account has been officially closed. This gives you a record for your files.
In short, you can close your checking account with confidence, knowing it won’t show up as a negative mark on your credit report. By taking a few minutes to tie up loose ends and avoid fees, you can make the switch without any worry for your financial health.
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