Closing a checking account does not hurt your credit score
Closing a checking account has no direct effect on your credit. Banks do not report checking account activity to the three major credit bureaus — Equifax, Experian, and TransUnion — so closing one will not lower your score, raise it, or change it at all.
This is different from closing a credit card or paying off a loan, both of which can affect your credit because those accounts appear on your credit report. A checking account is straightforward a place to store and move money. It is not a credit product, so it does not factor into the calculations that produce your credit score.
That said, closing a checking account can create problems that indirectly affect your credit if you are not careful. Those problems are avoidable with a few steps before you close the account.
Key Takeaways
- Checking accounts do not appear on your credit report, so closing one will not change your credit score in any direction.
- Unpaid fees or overdrafts left behind when you close an account can be reported to collections, which will damage your credit.
- Automatic payments linked to the old account can bounce, causing late payments on credit cards or loans that do show up on your credit report.
- Before closing, settle any outstanding balance, redirect automatic payments, and confirm the account is fully closed.
Why checking accounts do not appear on credit reports
Your credit score measures how reliably you borrow and repay money. It is built from accounts where you owe money and have agreed to pay it back on a schedule — credit cards, personal loans, mortgages, auto loans, and student loans. A checking account is not a debt product. You put your own money in, and you take your own money out. The bank is holding your money, not lending you theirs.
Because there is no borrowing involved, there is nothing to report to the credit bureaus. The bank may report the account to ChexSystems, which is a separate checking account history system used by banks to decide whether to open accounts for you in the future. But ChexSystems is not the same as your credit report, and it does not affect your credit score.
How closing a checking account can indirectly damage your credit
While the closure itself does not touch your credit, the way you close the account can create problems that do. The most common is leaving money owed to the bank. If you close an account with an outstanding balance — unpaid fees, overdraft charges, or a negative balance — the bank can send that debt to a collection agency. A collection account will appear on your credit report and lower your score.
The second common problem is automatic payments. If you have set up automatic bill payments from the checking account you are closing — a credit card payment, loan payment, utility bill, or insurance premium — and you do not redirect them before the account closes, those payments will bounce. A bounced payment can result in a late payment on the underlying account, which gets reported to the credit bureaus if the payment is more than 30 days late.
A third, less obvious problem is a gap in your banking history. If you close your only checking account and do not open a new one right away, you may have trouble opening a new account later because banks use ChexSystems to check your history. This does not directly hurt your credit, but it can make it harder to manage your finances, which can indirectly lead to late payments.
Steps to take before closing to protect your credit
Before you close the account, log in and check the balance. If it is negative or zero with pending fees, deposit money to bring it to zero or positive. Then wait a few days to make sure no additional fees post. Once the balance is truly zero and no fees are pending, you can proceed.
Next, identify every automatic payment linked to the account. Check your email for payment confirmations from the past few months, log into any accounts where you set up autopay (credit cards, loans, utilities, subscriptions), and look for any recurring charges. Write down the payment dates and amounts.
Open a new checking account before you close the old one, or at least have one ready to open when ready. Then update each automatic payment to pull from the new account. Most companies let you change the linked bank account online in a few minutes. For those that do not, call and ask them to update it.
Wait at least one full billing cycle after you have redirected all payments to confirm that nothing is still trying to pull from the old account. Then contact the bank and formally close the account. Ask the bank to confirm in writing that the account is closed and the balance is zero.
What happens if you miss a payment after closing
If a payment does bounce because you did not redirect it in time, the creditor will typically try to collect the payment again. If they reach you quickly, you can usually make the payment when ready and avoid a late mark. If 30 days pass without payment, the creditor will report it to the credit bureaus as a late payment, and your score will drop.
The damage from a single late payment can last for years, but it fades over time. A late payment from six months ago hurts less than one from last month. If you realize a payment bounced, contact the creditor right away, make the payment, and ask if they will remove the late mark. Many will if you have a good history with them and this is your first miss.
Checking account closures and ChexSystems
When you close a checking account, the bank reports the closure to ChexSystems. If you closed the account in good standing — no unpaid fees, no fraud, no bounced checks — the record straightforward shows the account is closed. This does not hurt you.
If you closed it with an outstanding balance or after bouncing checks, that information stays on your ChexSystems record for five years. When you try to open a new checking account at another bank, they will see it. Some banks will still open an account for you; others will decline. But again, this is separate from your credit score and does not appear on your credit report.
The difference between closing and leaving an account inactive
Some people worry that closing an account is worse than just leaving it open and unused. In reality, closing is usually better. An inactive account still costs you money if the bank charges a monthly maintenance fee. It also leaves a potential security risk — the longer an account sits unused, the longer a fraudster has to notice it and try to use it.
The one exception is if you have a very old checking account that has been open for many years. Older accounts can be helpful when you explore for credit because they show a long history of managing money responsibly. But this is a minor factor in your credit score, and it is not worth paying monthly fees to keep an account open just for that reason.
Frequently Asked Questions
Will closing my checking account lower my credit score?
No. Checking accounts do not appear on your credit report, so closing one will not change your credit score. However, if you leave unpaid fees behind or miss payments on other accounts because you did not redirect automatic payments, those problems will hurt your credit.
Can a bank report a closed checking account to the credit bureaus?
No. Banks do not report checking accounts to the credit bureaus. They report to ChexSystems, which is a separate system used only for checking account history. ChexSystems does not affect your credit score.
What should I do with automatic payments before I close my account?
Log into each account where you have set up autopay (credit cards, loans, utilities, insurance) and update the linked bank account to your new checking account. Do this before you close the old account, and wait one billing cycle to confirm the new account is being charged instead of the old one.
If I leave money owed to the bank when I close, will it hurt my credit?
Yes. If you close an account with an unpaid balance or outstanding fees, the bank can send that debt to a collection agency. A collection account will appear on your credit report and lower your score. Always bring the balance to zero before closing.
Is it better to close a checking account or leave it inactive?
Closing is usually better. An inactive account may still charge monthly maintenance fees, and it creates a security risk if it sits unused for years. The only reason to keep an old account open is if it is very old and you want to preserve a long account history, but this is a minor factor in your credit score.