Closing a bank account does not affect your credit score
Closing a checking or savings account at your bank has no impact on your credit report or credit score. Banks do not report account closures to credit bureaus, and credit scores are built only from credit activity — borrowed money you repay or fail to repay. A bank account is a deposit account, not a credit account, so it never appears on your credit file in the first place.
The confusion often comes from mixing up two different financial systems. Your credit score tracks how you handle debt: credit cards, loans, mortgages, and payment history. Your bank account is separate. You can close it, reopen it, or switch banks without any of that touching your credit record.
That said, closing an account can create practical problems that are worth knowing about before you do it — even if your credit score stays untouched.
Key Takeaways
- Closing a bank account does not appear on your credit report and does not change your credit score.
- Banks report account closures to ChexSystems, a checking account history system separate from credit bureaus, which can affect your ability to open new bank accounts.
- If you close an account with an outstanding balance, overdraft, or unpaid fee, the bank may send it to collections, which will damage your credit.
- Automatic payments and direct deposits tied to the closed account will fail, potentially causing late payments on bills or missed paychecks.
- Closing your oldest account does not lower your credit score, but closing a credit card account can slightly reduce your available credit.
What ChexSystems is and why it matters
When you close a bank account, the bank reports it to ChexSystems, a consumer reporting agency that tracks checking and savings account history. This is not a credit bureau — it does not affect your credit score — but it is a separate record that banks check when you try to open a new account.
If you close an account in good standing (no overdrafts, no unpaid fees), the closure itself is neutral. But if you close an account with a negative balance or outstanding fees, that negative mark stays on your ChexSystems record for up to five years. Banks see this record and may deny you a new account, charge you higher fees, or require a deposit to open one.
You can request your ChexSystems report for free once per year at www.chexsystems.com. If there are errors, you can dispute them directly with ChexSystems.
When closing an account can hurt your credit
Closing the account itself does not hurt your credit, but what happens to money you owe does. If you close an account while carrying an overdraft, unpaid fees, or a negative balance, the bank will try to collect that debt. If they cannot collect it, they may send it to a collections agency, which will report it to credit bureaus and damage your credit score.
Before you close any account, check your balance and make sure there are no pending charges or overdrafts. Pay off any negative balance first. If the bank has already sent the debt to collections, closing the account does not erase the debt — you still owe it, and it still appears on your credit report.
The same rule applies to credit cards: closing the card itself does not hurt your score, but if you close it while carrying a balance, you still owe that balance and it still counts against you.
Automatic payments and direct deposits will stop working
The real danger in closing a bank account is not your credit score — it is the payments and deposits tied to that account. If you have automatic bill payments set up on the account you are closing, those payments will fail once the account closes. This includes utilities, insurance, loan payments, and subscriptions.
A failed payment can trigger a late fee from the company you owe, and if the payment is late enough, it can be reported to credit bureaus and damage your credit. The solution is to move all automatic payments to your new account before you close the old one. Contact each company — your mortgage lender, credit card issuer, utility provider — and update your banking information.
The same applies to direct deposits. If your paycheck is deposited into the account you are closing, contact your employer's payroll department and provide your new account number. If a paycheck bounces because the account is closed, you may not get paid on time, which can create a cascade of late payments.
How to close an account safely
Before you close, take these steps in order:
- Check your balance and make sure it is zero or positive. Pay off any overdrafts or fees.
- Review all automatic payments and direct deposits tied to the account. Write them down.
- Contact each company or your employer and update your banking information to your new account.
- Wait at least one full billing cycle to make sure all automatic payments have processed to the new account.
- Go to your bank and request account closure. Ask for written confirmation.
- Keep the confirmation letter for your records.
If you are closing the account because of a dispute with the bank or because you want to leave due to poor service, you can close it immediately — but still follow the steps above to protect your payments and deposits.
Closing a credit card account versus a bank account
Closing a credit card account is different from closing a bank account because credit cards are credit accounts. Closing a credit card can slightly lower your credit score by reducing your total available credit, which affects your credit utilization ratio. But closing a bank account has no effect on credit utilization or any other credit metric.
If you are closing both a bank account and a credit card at the same time, the credit card closure may affect your score, but the bank account closure will not. The two are separate systems.
What happens to unclaimed money in a closed account
If you close an account and forget about it, any remaining balance becomes the property of your state under unclaimed property laws. After a period of inactivity (usually three to five years, depending on your state), the bank transfers the money to your state's unclaimed property program.
You can recover this money by searching your state's unclaimed property database, usually found on your state treasurer's website. The money does not disappear, but it is easier to claim it before the account closes. If you are closing an account, withdraw or transfer any remaining balance first.
Frequently Asked Questions
Will closing my bank account lower my credit score?
No. Bank accounts do not appear on your credit report. Closing a checking or savings account has zero impact on your credit score. Credit scores are based only on credit activity like loans and credit cards, not deposit accounts.
Can a bank report me to credit bureaus for closing an account?
Only if you owe money when you close it. If you close an account with a negative balance or unpaid fees, the bank may send that debt to collections, which will be reported to credit bureaus. If your account is in good standing, there is no credit bureau report.
What if I close my account and forget about an automatic payment?
The payment will fail, and the company you owe may charge you a late fee and report the late payment to credit bureaus. Before you close, contact every company with an automatic payment on that account and update your banking information. Wait one billing cycle to confirm the switch worked.
Does closing my oldest bank account hurt my credit?
No. Age of accounts matters for credit cards, not bank accounts. Closing your oldest checking or savings account has no effect on your credit score, even though closing your oldest credit card can slightly lower it.
Can I reopen a bank account I closed?
Yes, but it depends on why you closed it. If you closed it in good standing, most banks will let you reopen it or open a new account. If you closed it with a negative balance or unpaid fees, the bank may refuse to open a new account for you, or ChexSystems may flag you for other banks. Pay off any debt first.