Closing a bank account does not directly hurt your credit score
Closing a checking or savings account at your bank has no impact on your credit score. Banks do not report account closures to the three major credit bureaus — Equifax, Experian, and TransUnion — so the act of closing the account itself creates no negative mark.
Your credit score is built from credit history: loans you have taken, credit cards you have used, how often you paid on time, and how much debt you currently carry. A bank account is a deposit account, not a credit account. The credit bureaus have no record of it and no way to know when you close it.
However, the reason you close an account or what happens during the closure can indirectly affect your credit. Understanding the difference between the closure itself and the circumstances around it will help you avoid the scenarios where your score does take a hit.
Key Takeaways
- Closing a bank account does not appear on your credit report because banks do not report deposit accounts to credit bureaus.
- Unpaid overdraft fees or negative balances sent to collections will damage your credit, even after you close the account.
- Closing a credit card account can lower your score by reducing available credit, but closing a bank account cannot.
- If your bank sells your account to another institution, the new bank may report old unpaid fees to credit bureaus.
When account closure might affect your credit indirectly
The closure itself is invisible to credit bureaus, but three situations can create credit damage during or after closing:
Unpaid overdraft fees or negative balances. If you close an account while you owe the bank money — whether from overdraft fees, minimum balance penalties, or a negative balance — the bank may send that debt to a collections agency. A collections account will appear on your credit report and lower your score. This damage comes from the unpaid debt, not from closing the account.
Closed accounts with outstanding disputes. If you have filed a dispute with your bank over a transaction and then close the account before the dispute is resolved, the bank may still report the outcome to credit bureaus if it involves fraud or unauthorized charges. This is rare, but it can happen.
Account sale to another institution. When a bank closes or sells its customer accounts to another bank, the new institution may inherit old fees or negative balances. If those debts are then reported to collections, your credit report will show the damage.
The difference between closing a bank account and closing a credit card
Closing a credit card account is different from closing a bank account, and the credit impact is different too. When you close a credit card, the card issuer reports the closure to credit bureaus. This can lower your credit score because it reduces your total available credit, which affects your credit utilization ratio — the percentage of your credit limit you are currently using.
For example, if you have two credit cards with $5,000 limits each ($10,000 total available credit) and you carry a $2,000 balance, your utilization is 20 percent. If you close one card, your available credit drops to $5,000, and your utilization jumps to 40 percent. Higher utilization lowers your score.
A bank account closure has no such effect because banks do not track or report available credit. Closing your checking account does not change any number that credit bureaus monitor.
How to close a bank account without damaging your credit
Before you close an account, take these steps to make sure no debt follows you:
First, check your balance. Log into your account online or call the bank and confirm the balance is zero or positive. If the balance is negative, ask the bank how much you owe and pay it immediately. Do not close the account while you carry a negative balance.
Second, set up a redirect for automatic payments. If you have direct deposit, bill payments, or automatic transfers linked to the account, change those to your new account before closing. Payments that bounce because the account is closed can trigger overdraft fees at the new bank and may be reported as unpaid bills.
Third, wait for pending transactions to clear. If you have written checks or pending debit card charges, wait a few days after the last transaction posts before closing. Closing an account with pending transactions can cause overdraft fees.
Fourth, request written confirmation of closure. When you close the account, ask the bank for a letter confirming the closure date and that the account balance was zero at the time of closure. Keep this letter in case the bank later claims you owe money.
What to do if a closed account is reported to collections
If you closed an account and later receive a notice that the bank has sent an unpaid balance to a collections agency, act quickly. First, contact the original bank and ask for documentation of what you owe. Sometimes banks report old fees incorrectly or send accounts to collections by mistake.
If you do owe the money, you have two options: pay the debt in full, or negotiate a settlement. Paying in full stops the collections process, though the account will still appear on your credit report for seven years from the original delinquency date. A settlement means you pay less than the full amount owed, but the account will be marked as "settled" rather than "paid in full," which has a slightly smaller impact on your score.
If you believe the debt is incorrect, file a dispute with the collections agency in writing within 30 days of receiving the notice. The agency must investigate and respond within 30 days. You can also file a dispute with the credit bureaus if the account appears on your credit report.
How long closed accounts stay on your credit report
If you close an account with a zero balance and no debt, the account will not appear on your credit report at all — there is nothing to report. If the account was closed because of unpaid debt sent to collections, the collections account will remain on your credit report for seven years from the date the debt first became delinquent, not from the date you closed the account.
During those seven years, the account will gradually have less impact on your score. After two or three years, the damage is usually minor. After seven years, the account is removed entirely.
Frequently Asked Questions
Will closing my bank account affect my ability to get a loan?
No, closing a bank account will not affect your loan prospects. Lenders look at your credit score and credit history, not your bank accounts. However, if closing the account results in unpaid fees sent to collections, that will hurt your ability to borrow.
Can a bank report a closed account to credit bureaus?
Banks do not report closed deposit accounts to credit bureaus under normal circumstances. They only report if there is unpaid debt associated with the account. If you close with a zero balance, nothing is reported.
What happens if I close my account and then the bank sends me a bill?
If the bank discovers unpaid fees after you close the account, they will contact you by mail or phone. You should respond immediately and either pay or dispute the charge. If you ignore it, the bank may send it to collections, which will damage your credit.
Does closing a joint bank account hurt both people's credit?
No. Closing a joint account does not hurt either person's credit score. However, if there is an unpaid balance on the joint account, both account holders may be responsible for the debt, and both could be affected if it goes to collections.
Should I close old bank accounts I no longer use?
There is no credit benefit to keeping old bank accounts open, but there is also no credit harm in closing them. Close accounts you no longer use if you want to simplify your finances, but do not keep them open just for your credit score — bank accounts do not affect it either way.