Closing a checking account does not hurt your credit score
Closing a checking account has no direct effect on your credit score. Credit bureaus — the companies that track your borrowing history and calculate your score — do not monitor checking accounts at all. They only track credit accounts: credit cards, loans, mortgages, and lines of credit where you borrow money and pay it back over time.
A checking account is a deposit account. You put your own money in and take it out. Because you are not borrowing, the account never appears on your credit report, and closing it never changes your score.
That said, closing a checking account can create problems that indirectly affect your credit if you are not careful. Understanding the difference between the account itself and what happens after you close it will help you avoid those pitfalls.
Key Takeaways
- Closing a checking account itself does not appear on your credit report or change your credit score in any way.
- If you close an account and bounce checks or miss payments on other bills because you lost track of your money, those problems will hurt your credit.
- Banks report closed accounts to ChexSystems, a checking account history database separate from credit bureaus, which can affect your ability to open new accounts.
- Moving your money to a new account before closing the old one prevents overdrafts and missed payments that could damage your credit indirectly.
Why credit bureaus ignore your checking account
Your credit score measures one thing: how reliably you repay borrowed money. The three major credit bureaus — Equifax, Experian, and TransUnion — only track accounts where you owe a debt and make payments toward it. A checking account is yours from the start; you own the money in it, so there is nothing to repay.
Banks do not report checking account activity to credit bureaus because it is not credit activity. They may report it to ChexSystems, a separate database that tracks checking account history, but ChexSystems is not a credit bureau and does not affect your credit score. ChexSystems matters only when you try to open a new checking account at a different bank — some banks check it to see if you have a history of overdrafts or fraud.
The only way a checking account closure could touch your credit score is if the closure itself causes you to miss payments on credit accounts. That is an indirect effect, not a direct one.
How closing a checking account can indirectly damage your credit
If you close a checking account without moving your money elsewhere first, you may accidentally miss payments on bills that were set to withdraw from that account. Missed payments on credit cards, loans, or other credit accounts go straight to your credit report and lower your score.
The same risk applies if you close an account and forget to update your payment information with creditors. A payment that bounces because the account no longer exists may be reported as late or missed, even if you had the money and intended to pay.
Overdrafts can also create a chain reaction. If you close an account while it still has pending transactions, the bank may charge overdraft fees. If you do not pay those fees, the bank may send the debt to a collection agency, which will report it to credit bureaus and damage your score.
Steps to close a checking account without harming your credit
The safest way to close a checking account is to move your money and update your payment setup before you close it. Start by opening a new account at your current bank or a different one, and give yourself at least two weeks before closing the old account.
During those two weeks, log into your old account and check for any automatic payments or transfers set to come out of it. Common ones include utility bills, insurance premiums, loan payments, subscriptions, and paycheck direct deposits. Update each one to pull from your new account instead.
Once you have moved all your automatic payments and confirmed they have gone through at least once from the new account, you can close the old one. Call the bank or visit a branch — do not close it online unless the bank confirms the account is fully closed and no pending transactions remain.
What ChexSystems means for your next account
When you close a checking account, the bank reports it to ChexSystems, a checking account history system. This is not your credit report, but it can affect whether other banks will open an account for you.
A normal account closure — one with no overdrafts, fraud, or unpaid fees — will not prevent you from opening a new account elsewhere. Banks use ChexSystems mainly to flag accounts closed due to negative reasons: repeated overdrafts, bounced checks, or suspected fraud.
If your account was closed because of overdrafts or unpaid fees, some banks may deny you a new account or require you to pay off the old debt first. You can request your ChexSystems report for free once a year at www.chexsystems.com to see what is being reported about you.
The difference between ChexSystems and your credit report
ChexSystems and credit bureaus are separate systems that track different things. Your credit report shows borrowed money and how you repaid it. Your ChexSystems report shows checking account history and whether you mismanaged deposit accounts.
A bank can deny you a new checking account based on ChexSystems without it ever touching your credit score. The reverse is also true: a bad credit score will not prevent you from opening a checking account, though some banks may require a deposit or offer you a limited account.
Understanding this difference matters because it means you can have a poor credit score and still open a checking account at most banks, but you cannot have a history of overdrafts or fraud on ChexSystems and expect straightforward approval everywhere.
What to do if you already closed an account carelessly
If you closed a checking account and later discovered that a payment bounced or went unpaid, check your credit report to see if it has been reported. You can get a free copy of your credit report from each of the three bureaus once a year at www.annualcreditreport.com.
If a missed payment appears on your report, contact the creditor and explain what happened. Many will remove a single late payment if you bring the account current and ask them to consider it a one-time mistake. If the debt was sent to a collection agency, you may be able to negotiate a settlement or payment plan.
If overdraft fees were charged and sent to collections, you can also dispute the debt with the collection agency if you believe it was reported in error. Getting the original bank to confirm the account is closed and no further fees will be charged can help your case.
Frequently Asked Questions
Will closing a checking account lower my credit score?
No. Checking accounts do not appear on your credit report, so closing one has no direct effect on your score. Your score only changes if closing the account causes you to miss payments on credit accounts like credit cards or loans.
Can a bank close my checking account and hurt my credit?
A bank can close your account, but the closure itself does not hurt your credit. However, if the bank closes it due to unpaid overdraft fees and sends that debt to collections, the collection account will appear on your credit report and lower your score.
What is ChexSystems and how is it different from my credit score?
ChexSystems is a database that tracks checking account history, separate from credit bureaus. It records overdrafts, bounced checks, and fraud. Banks use it to decide whether to open new accounts for you, but it does not affect your credit score.
Do I need to close old checking accounts to improve my credit?
No. Closing a checking account will not improve your credit score. Your score is based only on credit accounts. Leaving an old checking account open costs you nothing and has no effect on your credit either way.
What should I do with automatic payments before closing a checking account?
Update all automatic payments to pull from your new account before you close the old one. Check utility bills, insurance, loans, subscriptions, and paycheck deposits. Wait at least two weeks and confirm each payment has gone through from the new account before closing the old one.