Changing checking accounts does not hurt your credit score

Opening a new checking account and closing an old one will not lower your credit score. Banks do not report checking account activity to credit bureaus. Your credit score depends on credit accounts—credit cards, loans, mortgages—not on deposit accounts like checking or savings.

The confusion usually comes from the fact that banks do a hard inquiry when you open a new account. A hard inquiry can lower your score by a few points for a few months. But this is temporary and minor compared to what happens with credit accounts. You can switch checking accounts as often as you need without damaging your credit.

Key Takeaways

  • Checking accounts do not appear on your credit report, so opening or closing one has no direct effect on your credit score.
  • Banks may do a hard inquiry when you open a new account, which can lower your score by a few points temporarily.
  • The hard inquiry effect fades after three to six months and does not affect your ability to borrow.
  • Closing a checking account does not hurt your score, but closing a credit card account can, so do not confuse the two.

Why banks pull your credit when you open checking

When you open a checking account, the bank runs a ChexSystems check or similar banking history report. This is different from a credit check. ChexSystems looks at your history of overdrafts, bounced checks, and fraud—not your credit score. Many banks also do a hard inquiry on your credit report as part of their risk assessment, especially if you are opening an account online or with a new-to-them bank.

A hard inquiry appears on your credit report and can lower your score by 5 to 10 points. The effect is temporary. After three to six months, the inquiry stops affecting your score. After two years, it disappears from your report entirely. One hard inquiry is not enough to prevent you from getting a loan or credit card later.

If you are opening multiple checking accounts in a short time, each one may trigger a hard inquiry. Multiple inquiries in a short window can add up. Space out account openings by a few months if your credit score is already low or if you are planning to explore for a mortgage or car loan soon.

What actually damages your credit score

Credit scores measure how you handle borrowed money. They track credit cards, personal loans, auto loans, mortgages, and student loans. Deposit accounts—checking, savings, money market accounts—do not factor in at all. You can have a perfect checking account history and a terrible credit score, or vice versa.

The things that hurt your credit score are: missed or late payments on credit accounts, high balances relative to your credit limits, closing old credit card accounts, defaulting on loans, and collections or bankruptcy. Switching banks does none of these things.

Do not confuse closing a checking account with closing a credit card. Closing a credit card can lower your score because it reduces your total available credit and may increase your credit utilization ratio. Closing a checking account has no effect on credit at all.

Hard inquiries versus soft inquiries

When a bank opens a checking account, they typically do a soft inquiry on ChexSystems and may do a hard inquiry on your credit report. A soft inquiry does not affect your credit score. A hard inquiry does, but only slightly and only temporarily.

You can ask the bank which type of inquiry they will do before you open the account. Some banks advertise "no credit check" checking accounts, which means they will not do a hard inquiry—they will only check ChexSystems. If you have a low credit score or are about to explore for a mortgage, choosing a bank that does not do a hard inquiry can save you a few points.

Hard inquiries from checking account applications are treated differently than hard inquiries from credit applications. Credit bureaus know that checking account inquiries are routine and low-risk. They do not weight them as heavily as inquiries for credit cards or loans.

When to worry about the timing of a new account

If you are planning to explore for a mortgage, auto loan, or credit card in the next few months, you may want to delay opening a new checking account. The hard inquiry will lower your score by a small amount, and lenders will see it on your report. Most lenders will not deny you because of a single checking account inquiry, but if your credit is already borderline, it could matter.

The best approach is to open your new checking account first, then wait three to six months before explore for credit. This gives the hard inquiry time to stop affecting your score. If you need to switch banks urgently, do it anyway—the impact is small enough that it should not change a lender's decision if your overall credit profile is solid.

If you are closing an old checking account, there is no timing concern at all. Closing a deposit account does not trigger any inquiry and does not affect your credit score.

How to minimize the impact of opening a new account

Ask the bank whether they do a hard inquiry before you open the account. If they do, ask whether they offer accounts that do not require one. Some banks have basic checking products that only check ChexSystems.

If you are opening multiple accounts, space them out by at least a few months. Multiple hard inquiries in a short time can add up to a bigger score drop than a single inquiry.

Do not close your old checking account when ready after opening the new one. There is no credit benefit to closing it quickly, and you may need access to the old account while you are transitioning. Close it once you have confirmed that all your automatic payments and direct deposits have moved to the new account.

If you have a very low credit score or are in the middle of a mortgage process, consider waiting to switch banks until after the loan closes. The temporary score drop from a hard inquiry is not worth the risk of a lender pulling your credit again and seeing a recent inquiry.

Frequently Asked Questions

Will opening a checking account show up on my credit report?

The checking account itself will not appear on your credit report. If the bank does a hard inquiry, that inquiry will show up on your report for two years, but it will not affect your score after six months or so. Checking accounts are deposit products, not credit products.

Can I be denied a checking account because of my credit score?

Banks do not usually deny checking accounts based on credit score. They check ChexSystems for a history of overdrafts, bounced checks, or fraud. If you have been blacklisted in ChexSystems, some banks will deny you. Credit score is rarely the reason.

Does closing a checking account hurt my credit?

No. Closing a checking account has no effect on your credit score. Deposit accounts do not appear on your credit report. You may be thinking of closing a credit card, which can lower your score by reducing your available credit.

How long does a hard inquiry from a checking account stay on my credit report?

A hard inquiry stays on your credit report for two years, but it stops affecting your credit score after about three to six months. After that time, lenders can still see it, but it no longer counts against you.

Should I wait to open a checking account if I am explore for a mortgage?

If you are in the middle of a mortgage process, it is safer to wait until after closing. A hard inquiry will lower your score slightly, and the lender may pull your credit again and see the new inquiry. If your credit is already tight, this could matter. Once the mortgage closes, you can switch banks without concern.