A closed checking account does not directly hurt your credit score
Closing a checking account by itself will not lower your credit score or show up on your credit report. Banks do not report checking account closures to the three credit bureaus — Equifax, Experian, and TransUnion — the way they report credit cards or loans. Your credit score is built from your history of borrowing and repaying money, not from how many deposit accounts you have open or closed.
That said, the reason you closed the account, or what happens after you close it, can indirectly affect your credit. The most common way this happens is if you leave an unpaid balance or fee on the account when you close it. If the bank sends that debt to a collection agency, that will appear on your credit report and damage your score.
Key Takeaways
- Closing a checking account itself does not appear on your credit report or lower your credit score.
- An unpaid balance, overdraft fee, or negative balance sent to collections will hurt your credit, even after you close the account.
- Banks may report your account closure to ChexSystems, a checking account history system separate from credit bureaus, which can affect your ability to open accounts elsewhere.
- Closing an account does not erase its history — banks and ChexSystems keep records of closed accounts for several years.
When a closed account can hurt your credit indirectly
If you close a checking account with a negative balance — meaning you owe the bank money — that debt can be reported to a credit bureau if you do not pay it. This happens most often when you overdraw your account (spend more than you have) and then close it without settling the overdraft fee or the overdrawn amount.
The bank will usually try to collect the debt from you directly first, through phone calls or letters. If you ignore those attempts, the bank may sell the debt to a third-party collection agency. Once a collection agency owns the debt, they report it to the credit bureaus, and that report will lower your score and stay on your credit report for up to seven years.
Even a small unpaid fee can trigger this chain. A $35 overdraft fee left unpaid when you close the account is still a debt, and banks do pursue collection on small amounts.
ChexSystems: the checking account history that is separate from credit
When you close a checking account, the bank may report the closure to ChexSystems, a system that tracks checking and savings account history. ChexSystems is not a credit bureau — it does not affect your credit score directly — but it does affect your ability to open new bank accounts.
Banks use ChexSystems to see whether you have a history of bounced checks, unpaid overdrafts, or accounts closed due to misuse. If your account closure is reported to ChexSystems as problematic — for example, because you left it with a negative balance — other banks may refuse to open a new account for you, or may require you to pay a higher fee.
You can request your own ChexSystems report for free once per year at www.chexsystems.com. If there is an error on your report, you can dispute it directly with ChexSystems.
How to close a checking account without damaging your financial record
Before you close the account, make sure the balance is zero or positive. Withdraw any remaining money or transfer it to another account. If there are any pending transactions or automatic payments still linked to the account, cancel or redirect them first — a transaction that posts after you close the account can create an overdraft.
Contact your bank and tell them you want to close the account. Ask them to confirm in writing that the account is closed with a zero balance. Keep that confirmation. If the bank later claims you owe money on the closed account, you will have proof that you settled it before closing.
If you have already closed an account and left a balance unpaid, contact the bank when ready and pay what you owe. The sooner you settle the debt, the less likely it is to be sent to collections, and the sooner the bank will stop reporting it as unpaid.
What happens to your account history after you close
Closing a checking account does not erase its history. Banks keep records of closed accounts for at least five to seven years, and ChexSystems keeps records for five years. If you explore for a new account at the same bank or a different bank, they may see that you closed a previous account and ask why.
If you closed the account in good standing — with no unpaid fees or overdrafts — this will not hurt you. Banks understand that people close accounts for normal reasons: moving to a different bank, consolidating accounts, or straightforward not needing the account anymore. A clean closure is not a red flag.
The difference between closing an account and having it closed by the bank
There is an important difference between closing an account yourself and having the bank close it for you. When you close your own account, you control the timing and can make sure the balance is settled. When a bank closes your account — usually because of repeated overdrafts, suspicious activity, or unpaid fees — that closure is reported to ChexSystems as a bank-initiated closure, which is a much bigger problem for opening accounts elsewhere.
If your bank has threatened to close your account, contact them and ask what you need to do to keep it open. Paying any outstanding balance and stopping the behavior that triggered the warning (such as frequent overdrafts) may prevent the closure.
Frequently Asked Questions
Will closing my checking account lower my credit score?
No. Checking account closures are not reported to credit bureaus, so the closure itself will not affect your credit score. However, if you leave an unpaid balance on the account when you close it and that debt goes to collections, the collection account will lower your score.
Can I be denied a new bank account because I closed one?
Yes, if the closure was reported to ChexSystems as problematic — for example, because you left a negative balance or had repeated overdrafts. Banks check ChexSystems when you explore for a new account. A clean closure will not cause a denial.
How long does a closed account stay on ChexSystems?
ChexSystems keeps records of closed accounts for five years. After five years, the record is removed. You can view your own ChexSystems report for free once per year at www.chexsystems.com and dispute any errors.
What should I do if I closed an account with an unpaid balance?
Contact the bank and pay the balance as soon as possible. The sooner you settle the debt, the less likely it is to be sent to a collection agency. Ask the bank to confirm in writing that the debt is paid and the account is settled.
Does closing a credit card hurt my credit the same way as closing a checking account?
No. Closing a credit card is reported to credit bureaus and can lower your score by reducing your available credit and changing your credit history. Closing a checking account has no direct effect on credit because checking accounts are not part of your credit report.