Closing a checking account does not directly hurt your credit score
Banks do not report checking account activity to the three major credit bureaus—Equifax, Experian, and TransUnion. Closing a checking account will not appear on your credit report, and your credit score will not drop because you closed it. The account simply stops existing in your banking records.
However, closing a checking account can indirectly affect your credit if the closure triggers certain events. The damage, when it happens, comes from what follows the closure, not from the closure itself.
Key Takeaways
- Checking accounts are not reported to credit bureaus, so closing one does not change your credit score directly.
- Your credit can be harmed if closing an account causes you to miss bill payments or overdraft fees that lead to collections.
- If you have automatic bill payments set up on the account you are closing, those payments will fail unless you move them first.
- Closing a checking account has no connection to credit cards, loans, or other credit products you may hold.
- The only banking product that affects credit is a savings account or money market account opened with a credit pull, which is rare.
When closing a checking account can hurt your credit indirectly
The risk appears when you close an account without moving your automatic payments. If you have a utility bill, insurance premium, loan payment, or credit card payment set to draft from that account, the payment will fail when the account closes. The merchant will then attempt to collect the money, and if they cannot reach you or you do not pay, the debt can be reported to a credit bureau.
A single missed payment can lower your credit score by 100 points or more, depending on your current score and payment history. Collections accounts—debts sent to a third-party collector—damage your score even more severely and stay on your report for seven years from the date of first delinquency.
The second indirect risk is overdraft fees. If you close an account while a pending transaction is still processing, the bank may charge an overdraft fee. This fee alone does not affect credit, but if the overdraft puts you below zero and the bank closes the account due to the negative balance, they may send the debt to collections if you do not pay it back.
How to close a checking account without damaging your credit
Before you close the account, log into your online banking or call the bank and identify every automatic payment or recurring charge tied to that account. Look at the past three months of statements to catch subscriptions, insurance payments, loan payments, and utility bills.
Move each payment to a different account at least one week before you close the checking account. Contact the merchant or biller directly if you are unsure how to update the payment method—do not rely on the bank to redirect the payment. For credit card payments, log into the card issuer's website and update the bank account there. For utilities and insurance, call the company's customer service line.
Once all payments have been moved, wait for one full billing cycle to confirm that no charges hit the old account. Then contact your bank and request to close the account. Ask the bank to confirm in writing that the account is closed and that no outstanding transactions remain.
What happens to linked accounts and credit products when you close checking
Closing a checking account does not affect credit cards, personal loans, auto loans, mortgages, or any other credit product you hold. Those accounts are separate from your checking account and are reported independently to credit bureaus. Your credit score is built from payment history on credit accounts, not from the existence or closure of deposit accounts.
If you have a savings account at the same bank, closing your checking account will not close the savings account unless you specifically request it. The two are separate products. Similarly, if you have a line of credit or overdraft protection linked to the checking account, closing the account may close that credit line—ask your bank before you proceed.
Checking account closure and ChexSystems: a different reporting system
While credit bureaus do not track checking accounts, a separate system called ChexSystems does. ChexSystems is a banking history report used by banks to decide whether to open new accounts for you. If you close a checking account with an outstanding negative balance, unpaid fees, or fraud, the bank may report it to ChexSystems.
A ChexSystems report does not affect your credit score, but it can make it harder to open a new checking or savings account at other banks. Banks check ChexSystems before approving new deposit accounts. If you have a report on file, some banks will deny your application or require you to pay the outstanding balance first.
To check your ChexSystems report, visit www.chexsystems.com and request your file. You can dispute inaccurate information or request removal if the issue has been resolved.
Reopening a checking account after closure
Closing a checking account does not prevent you from opening a new one. You can close an account and open a new one at the same bank or a different bank immediately. There is no waiting period or credit check required for a standard checking account.
The only exception is if you have an outstanding negative balance or unpaid fees at the bank where you closed the account. The bank may freeze your ability to open new accounts until the debt is paid. If you owe money, contact the bank's customer service department and ask what balance you need to settle before you can open a new account.
Frequently Asked Questions
Can closing a checking account lower my credit score?
No, closing a checking account itself does not lower your credit score because banks do not report checking accounts to credit bureaus. Your credit can only be harmed if closing the account causes you to miss payments on credit products like credit cards or loans.
What if I close my checking account and a bill payment fails?
Contact the biller immediately and make the payment by another method. If the payment is only a few days late, most companies will not report it. If it becomes 30 days late, the creditor may report it to credit bureaus. The sooner you pay, the less damage to your credit.
Does closing a checking account affect my ability to get a credit card or loan?
No. Credit card companies and lenders look at your credit report, not your checking account history. Closing a checking account will not appear on your credit report and will not affect your ability to borrow money.
Will my bank report me to ChexSystems if I close my account?
Only if you have an outstanding negative balance, unpaid fees, or fraud associated with the account. A normal closure with a zero balance will not be reported to ChexSystems.
How long does it take to close a checking account?
Most banks can close an account the same day you request it, though it may take one to three business days for the account to fully close and any remaining balance to be mailed to you as a check.