When you’re trying to build or maintain a healthy credit score, it’s natural to wonder how every financial move you make will impact it. You might be considering opening a new checking account and find yourself asking: will this simple action cause my score to dip? It’s a common question, especially since other banking activities, like applying for a credit card, do affect your credit.
The good news is that the act of opening a standard checking account by itself does not affect your credit score. Let’s look at why that is and clear up some of the confusion surrounding your bank accounts and your credit report.
Why Your Checking Account Stays Off Your Credit Report
The main reason opening a checking account doesn’t affect your credit is because of the type of financial relationship it creates. A checking account is considered a deposit account. You’re putting your own money into the bank, and the bank is holding it for you. This is different from a credit account, like a loan or credit card, where a lender is trusting you to pay back money you’ve borrowed.
Since you aren’t borrowing any funds, banks typically do not perform a hard inquiry on your credit report when you open a standard checking account. That hard inquiry is what can temporarily lower your score, so avoiding it is key.
When Your Bank Might Look at Your Credit
While a standard account opening won’t trigger a credit check, some situations might. Some banks, particularly online-only institutions, may use a soft inquiry to verify your identity. A soft inquiry does not affect your credit score. However, if you apply for a checking account that comes with special features, like an attached line of credit or overdraft protection that functions as a loan, the bank might then perform a hard credit pull. They will almost always inform you before doing this.
Other Ways Your Bank Account Can Impact Credit
It’s important to know that while opening an account doesn’t hurt your credit, mismanaging it indirectly can. If you have an account with an unpaid negative balance that gets sent to a collection agency, that collection account will almost certainly be reported to the credit bureaus and can severely damage your score. Keeping your account in good standing is always the best practice.
Managing Your Accounts with Confidence
You can open that new checking account with confidence, knowing it won’t harm your credit history. Focus on using it to build good financial habits, like tracking your spending and avoiding fees. For your credit score, direct your attention to actions that truly matter: paying your credit card bills and loan installments on time, every time.
In short, your checking account and credit score operate in two different arenas. Opening a checking account is a safe step for your credit health, allowing you to manage your day-to-day finances without worry.
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