Opening a savings account does not hurt your credit score

A savings account by itself has no effect on your credit score, positive or negative. Banks do not report savings accounts to the three credit bureaus — Equifax, Experian, and TransUnion — that calculate your score. When you open a savings account, the bank may check your banking history through ChexSystems or Early Warning Services, but these are separate systems that do not connect to credit reporting.

The confusion often comes from mixing up savings accounts with credit products. A savings account is a deposit account where you store money. A credit card or loan is a credit product where you borrow money and build a payment history. Only credit products show up on your credit report.

However, the way you open the account can matter. If the bank runs a hard inquiry on your credit report as part of their verification process, that inquiry will appear on your credit report and may lower your score by a few points. Most banks do not do this for savings accounts, but some do, especially if you are opening a premium account or if they are also offering you a credit product at the same time.

Key Takeaways

  • Savings accounts do not report to credit bureaus, so opening one will not build or damage your credit history.
  • Banks may run a hard inquiry on your credit report when you open a savings account, which can lower your score by a few points temporarily.
  • A hard inquiry typically stops affecting your score after 12 months and disappears from your report after two years.
  • Linking a savings account to a credit card or loan application can trigger a hard inquiry, so ask the bank whether they will pull your credit before you apply.

When a bank pulls your credit for a savings account

Most banks check your banking history, not your credit history, when you open a savings account. They use services like ChexSystems to see whether you have had problems with past accounts — overdrafts, fraud, or accounts closed due to negative balances. This check does not touch your credit report.

Some banks do pull your credit report, though it is less common for savings accounts than for checking accounts or credit products. Banks that are more likely to run a hard inquiry include those offering premium savings accounts with high interest rates, banks that bundle savings with credit monitoring, or institutions that run credit checks on all new customers regardless of product type. Online banks and credit unions vary widely in their practices.

If you want to know whether a specific bank will pull your credit, call their customer service line before you apply and ask directly. The answer is usually yes or no — they know their own policy. If they say yes, you can decide whether the account is worth the small temporary hit to your score.

How a hard inquiry affects your score and for how long

A hard inquiry typically lowers your credit score by 5 to 10 points, though the effect varies depending on your current score and credit history. If your score is already low, the impact may be slightly larger. If your score is high, the impact may be smaller.

The inquiry stays on your credit report for two years, but it stops affecting your score after about 12 months. After that point, it is still visible to lenders who pull your report, but the scoring models used by Equifax, Experian, and TransUnion no longer count it against you. Multiple inquiries within 14 to 45 days (depending on the scoring model) are often counted as a single inquiry, so if you are shopping around for the best savings rate, space out your applications or ask banks to check your banking history instead of your credit.

The temporary score drop is usually not a problem unless you are about to apply for a mortgage, car loan, or other major credit product. If you are in that situation, wait until after your loan closes before opening new accounts.

Savings accounts versus credit-building products

If you want to build credit, a savings account alone will not help. You need a credit product — a credit card, secured credit card, credit-builder loan, or becoming an authorized user on someone else's account. These products report your payment history to the credit bureaus, and on-time payments raise your score over time.

A credit-builder loan is a common choice for people with no credit or damaged credit. You borrow a small amount (usually $500 to $1,000), and the lender holds the money in a savings account while you make monthly payments. Once you finish paying, you get the money back. The payments report to all three credit bureaus, building your history without requiring you to have good credit to start.

Some banks offer savings accounts paired with credit-builder features, but the savings account itself is not what builds credit — it is the credit product attached to it. Read the fine print to understand which part of the account is reporting to credit bureaus.

What happens if you overdraft or close a savings account

Overdrafting a savings account does not show up on your credit report because the account itself is not a credit product. However, if you overdraft and do not pay the negative balance, the bank may close your account and send the debt to collections. A collections account will damage your credit score significantly and stay on your report for seven years.

Closing a savings account has no direct effect on your credit score. The account simply stops existing. However, if you close the account while it has a negative balance, that unpaid debt can be reported to credit bureaus and collections agencies.

If you are closing a savings account, make sure the balance is zero or positive before you close it. If there is a fee or penalty that would make the balance negative, pay it off first or ask the bank to waive it.

Hard inquiries versus soft inquiries

A soft inquiry is a credit check that does not show up on your credit report and does not affect your score. Soft inquiries happen when you check your own credit, when a bank pre-screens you for an offer, or when an employer or landlord checks your credit with your permission. These are invisible to lenders.

A hard inquiry is a credit check that appears on your credit report and may lower your score. Hard inquiries happen when you apply for credit — a loan, credit card, or sometimes a savings account. Lenders can see hard inquiries on your report, and multiple hard inquiries in a short time can signal that you are desperate for credit, which raises risk in their eyes.

When you call a bank to ask whether they will pull your credit for a savings account, you are asking whether they will run a hard inquiry. If they say they only check ChexSystems or your banking history, that is a soft inquiry and will not affect your score.

Frequently Asked Questions

Will opening a savings account hurt my credit if I am about to apply for a mortgage?

Only if the bank runs a hard inquiry on your credit report. Most banks do not pull credit for savings accounts, but some do. Call the bank before you apply and ask. If they will pull your credit, wait until after your mortgage closes to open the account. A single hard inquiry will not disqualify you for a mortgage, but it is better to avoid it if you can.

Can I build credit with a savings account?

No. Savings accounts do not report to credit bureaus, so they do not build credit history. You need a credit product like a credit card or credit-builder loan. Some banks offer savings accounts paired with credit-builder loans, but it is the loan that builds credit, not the savings account.

What is ChexSystems and does it affect my credit score?

ChexSystems is a banking history database that banks use to check whether you have had problems with past accounts. It is separate from credit reporting and does not affect your credit score. A ChexSystems check is a soft inquiry and will not show up on your credit report.

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

A hard inquiry stays on your credit report for two years, but it stops affecting your score after about 12 months. After 12 months, lenders can still see it, but the credit scoring models no longer count it against you.

Should I open a savings account if it means a hard inquiry?

That depends on your situation. If you are not applying for credit soon, a 5 to 10 point temporary drop is usually not worth worrying about. If you are about to apply for a mortgage or car loan, ask the bank to check your banking history instead of your credit, or wait until after your loan closes to open the account.