Does Closing a Bank Account Hurt Your Credit?
Written by
Kelli Francis
Edited by
Emily Gadd
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Unlike credit cards and loans, checking and savings accounts aren’t part of your credit history. That means they don’t show up on your credit report and won’t factor into your credit score.
However, there are indirect ways your credit score could be affected. For example:
- If you close the account with an outstanding negative balance.
- If you owe fees or have an overdraft that isn’t repaid, the bank may send the debt to collections, which would appear on your credit report and potentially lower your score.
Additionally, some banks report overdrafts or unpaid fees to ChexSystems, a banking reporting agency. While this doesn’t impact your credit score, it could make it harder to open a new bank account in the future.
How to Close a Bank Account Without Hurting Your Credit
If you want to close a bank account, here’s what you should do first:
1. Check for Any Pending Transactions
Before closing your account, make sure all transactions have cleared. This includes outstanding checks, debit card purchases and any scheduled payments. Closing an account too soon could lead to bounced payments or overdraft fees.
2. Transfer or Withdraw Your Funds
Once you confirm no pending transactions remain, move your money to your new account or withdraw it safely. If you’re switching banks, it’s best to keep both accounts open for a short period to ensure a smooth transition.
3. Update Automatic Payments and Direct Deposits
If your account is linked to recurring payments — such as utilities, streaming services or loan payments–update your payment method before closing the account. Also, switch direct deposits, like your paycheck or government benefits, to your new bank to avoid disruptions.
4. Contact the Bank to Officially Close the Account
Simply withdrawing all your money doesn’t mean the account is closed. You need to contact your bank to formally request closure. Ask for written confirmation to ensure no future fees or unexpected activity.
5. Monitor Your Credit Report and Bank Statements
Even after closing your account, check your bank statements for any surprise fees or reopened transactions. Reviewing your credit report can also help ensure no unpaid balances were sent to collections.
When Is It a Good Idea to Close a Bank Account?
- You’re switching to a better bank. Higher interest rates, better customer service, or lower fees are all valid reasons to switch.
- Avoiding maintenance fees. Some banks charge monthly fees if your balance falls below a certain amount. Switching to a fee-free account can save money.
- Simplifying your finances. Too many accounts can be hard to manage. Consolidating can make budgeting easier.
When Should You Keep Your Bank Account Open?
- If it’s linked to a loan or credit card – Some banks require you to maintain an account to keep an existing credit card or loan active.
- To avoid disrupting payments – If many bills and direct deposits run through your account, ensure everything is updated before closing to prevent payment issues.
- If there are closure fees – Some banks charge fees for closing accounts too soon, especially for recently opened ones.
FAQ
Here are the answers to some of the most frequently asked questions about bank accounts and credit scores.- Does it hurt your credit if a bank closes your account?
- It generally does not hurt your credit score if a bank closes your account unless it was closed with a negative balance that is reported to a collection agency. This could lead to a negative mark on your credit report.
- How much will my credit score drop if I close an account?
- Closing a bank account typically will not affect your credit score. However, closing credit card accounts can affect your credit score since it impacts your credit utilization ratio and the age of your credit accounts.
- Will closing an unused bank account help my credit score?
- No, closing unused bank accounts will not improve your credit score. Bank account information is not reported to credit bureaus and does not factor into your credit score.
- Does closing a checking account affect my credit score?
- No, closing a checking account won’t impact your credit score directly. However, if you owe money on the account and don’t pay it, it could be sent to collections, which would hurt your credit.
- Will my credit score drop if I close my bank account?
- No, because checking and savings accounts don’t appear on credit reports, closing them won’t affect your score.
- Can a closed bank account go to collections?
- Yes, if the account had an unpaid balance or overdraft fees when it was closed, the bank could send it to a collections agency. This could negatively affect your credit.
- What happens if I close an account with an overdraft balance?
- If you close an account that still has a negative balance, the bank may report it to ChexSystems or send the debt to collections. It’s best to settle any balance before closing.
- How do I close a bank account safely?
- Make sure all transactions have cleared, transfer your funds, update direct deposits and automatic payments, request official closure from your bank, and monitor your financial accounts afterward to ensure no unexpected charges appear. Closing a bank account is a simple process, but handling it properly can prevent unnecessary financial headaches. Taking a few extra steps now can save you from unexpected fees or credit issues down the line.
Allison Hache contributed to the reporting for this article.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- FDIC. 2024. "Thinking About Moving to Another Bank?"
- Consumer Financial Protection Bureau. 2023. "How do I dispute an error on my credit report?"
