Opening a checking account does not damage your credit score

Banks do not report checking accounts to the three major credit bureaus — Equifax, Experian, and TransUnion. A checking account is a deposit account, not a credit account. Your credit score measures how you borrow and repay money. A checking account has nothing to do with borrowing, so it has nothing to do with your score.

That said, the process of opening an account does involve a credit check in some cases, and that check can leave a small mark. The mark is temporary and separate from the account itself.

Key Takeaways

  • Banks do not report checking accounts to credit bureaus, so the account itself never affects your score.
  • Some banks run a hard inquiry when you open an account, which can lower your score by a few points for a few months.
  • Many banks use soft inquiries instead, which do not affect your score at all.
  • Overdrafts and unpaid fees on a checking account can damage your score if the bank sends the debt to a collection agency.

When a bank runs a hard inquiry

A hard inquiry is a credit check that shows up on your credit report and can lower your score. Some banks run a hard inquiry before opening a checking account, usually to assess the risk of you overdrawing the account or bouncing checks. Banks that do this include Chime, LendingClub, and some regional banks.

A hard inquiry typically lowers your score by 5 to 10 points. The impact fades over time — after three months, the effect is usually minimal, and after 12 months, the inquiry stops affecting your score altogether. Multiple hard inquiries within 14 to 45 days (depending on the scoring model) count as a single inquiry, so shopping around for accounts in a short window does not multiply the damage.

You can ask the bank before you apply whether they run a hard inquiry. If they do, you can decide whether the account is worth the temporary dip. If you are in the middle of applying for a mortgage or car loan, you may want to wait.

When a bank uses a soft inquiry instead

A soft inquiry is a credit check that does not show up on your credit report and does not affect your score. Most major banks — including Chase, Bank of America, Wells Fargo, and Citibank — use soft inquiries for checking accounts. Credit unions also typically use soft inquiries.

You will not know whether a bank uses a soft or hard inquiry unless you ask. Call the bank's customer service line or check their website before you open an account. The answer is usually listed under "frequently asked questions" or "how we check your credit."

How overdrafts and unpaid fees can hurt your score

Once the account is open, the account itself still does not report to credit bureaus. However, if you overdraw the account repeatedly and do not pay the overdraft fees, the bank may send the debt to a collection agency. A collection account will damage your credit score significantly and stay on your report for seven years.

Overdraft fees typically range from $25 to $35 per overdraft, and banks can charge multiple fees per day if you stay overdrawn. If you rack up hundreds of dollars in unpaid fees, the bank has more incentive to pursue collection. Paying overdraft fees promptly, even if you have to do it over time, keeps the debt out of collections.

Some banks offer overdraft protection, which links your checking account to a savings account or credit line and automatically transfers money to cover overdrafts. This prevents the overdraft from happening in the first place, so there is no fee and no damage to your score.

ChexSystems and banking history reports

Banks also check ChexSystems, a banking history report separate from your credit report. ChexSystems tracks bounced checks, overdrafts, and closed accounts. A negative ChexSystems record can prevent you from opening a new account at many banks, but it does not affect your credit score.

ChexSystems records stay on file for five years. If you have a negative record — for example, you closed an account with an unpaid overdraft — you may be denied when you try to open a new checking account. You can request your ChexSystems report for free at chexsystems.com and dispute any errors.

What happens if you close the account

Closing a checking account does not affect your credit score either. The account does not report to credit bureaus when it opens, and it does not report when it closes. However, if you close the account while you owe money — such as unpaid overdraft fees — the bank may pursue collection, which will damage your score.

Before you close an account, make sure there are no pending charges or fees. Check your balance, review recent transactions, and confirm that all automatic payments have stopped. Some banks charge a fee to close an account if you close it within a certain time frame (often 90 days to six months), so read the terms before you open.

Frequently Asked Questions

Will opening multiple checking accounts hurt my credit?

Multiple hard inquiries in a short time may count as one inquiry, so the damage is limited. However, opening many accounts in a short window can raise red flags with banks and ChexSystems. Space out account openings by at least a few weeks if you are opening more than one.

Does a debit card affect my credit score?

No. A debit card draws from your checking account balance, not from borrowed money. Credit bureaus do not track debit card use. Only credit cards, loans, and lines of credit affect your score.

Can I see which banks use soft inquiries?

You have to call or check each bank's website individually. Most major national banks use soft inquiries, but policies vary by region and account type. Ask before you apply so you know what to expect.

What if a bank runs a hard inquiry without my permission?

Banks must have your permission to run a hard inquiry. If a bank ran one without your consent, you can dispute it with the credit bureau. File a dispute at equifax.com, experian.com, or transunion.com, and include a copy of your application showing you did not authorize the inquiry.

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

A hard inquiry stays on your report for two years but stops affecting your score after 12 months. After 12 months, it is visible but does not lower your score anymore.