Closing a checking account does not lower your credit score
Closing a checking account has no direct effect on your credit score. Banks do not report checking account activity to the three credit bureaus—Equifax, Experian, and TransUnion—so opening or closing one does not create a record that affects your credit history.
Your credit score is built from credit accounts: credit cards, loans, mortgages, and lines of credit. A checking account is a deposit account, not a credit account. The bank knows you have it, but the credit bureaus do not.
That said, closing a checking account can create problems that indirectly affect your credit if you are not careful about the timing and what you do next.
Key Takeaways
- Checking accounts do not appear on your credit report, so closing one will not change your credit score.
- If you close an account with an outstanding balance or unpaid fees, the bank may send the debt to collections, which will damage your credit.
- Closing a checking account can disrupt automatic bill payments or direct deposits if you do not redirect them first.
- Some banks report closed accounts to ChexSystems, a checking account history database that other banks use to decide whether to open accounts for you.
When closing a checking account creates credit damage
The damage happens only if you leave the account with a negative balance or unpaid fees. If your account goes into overdraft and you do not cover it, or if the bank charges you fees you do not pay, the bank can report that debt to a collection agency. A collection account will appear on your credit report and lower your score.
Before you close any account, check the balance. If it is negative, deposit enough to bring it to zero. If there are pending fees or charges you do not understand, call the bank and ask them to explain or remove them. Once the account shows a zero or positive balance with no outstanding charges, you can close it without credit risk.
The timing matters. If you close an account on a day when a check is still processing or a bill payment is scheduled to come out, the bank may charge you an overdraft fee. That fee can trigger the collection cycle. Close the account only after you have confirmed that all pending transactions have cleared.
How to avoid disrupting your finances when you close
Closing a checking account is straightforward, but the weeks before matter more than the day itself. Start by redirecting anything that depends on that account: direct deposits from your employer, automatic bill payments, and transfers to savings.
Contact your employer's payroll department or HR and provide your new account number. Most employers can change this in one or two pay cycles. For bills you pay automatically—utilities, insurance, loan payments—log into each company's website and update your bank details there. Do not rely on the old account to forward payments; it will not.
If you receive Social Security, tax refunds, or other government payments by direct deposit, update those through the relevant agency's website. For Social Security, use ssa.gov. For tax refunds, update your information on the IRS website or through your tax software before filing.
Once everything has been redirected and you have confirmed the account balance is zero, contact the bank to close the account. Some banks let you do this online; others require a phone call or a visit to a branch. Ask the bank to confirm in writing that the account is closed and that there are no outstanding fees or balances.
ChexSystems: The checking account credit report
While closing a checking account does not affect your credit score, it may appear in ChexSystems, a database that banks use to check your checking account history. ChexSystems is not a credit bureau, and it does not calculate a score the way Equifax does. But banks do look at it when you open a new account.
If you close an account in good standing—zero balance, no fees owed—it will show as closed but will not harm you. If you close an account after overdrafting or leaving fees unpaid, the bank may report that to ChexSystems, and other banks may refuse to open accounts for you.
You can request your ChexSystems report for free once per year at chexsystems.com. If you see an error or a closed account you believe was reported unfairly, you can dispute it through the same website.
The difference between closing and leaving an account dormant
Some people close accounts because they think they are not using them. Before you close, consider whether you might want to keep it open but inactive. A dormant account takes up no space and costs nothing if it has a zero balance and no monthly fees.
Keeping an old account open can actually help you in one small way: it preserves your banking history with that institution. If you ever need to borrow money or need the bank to verify your account history, having an older account on record can be useful. The account will not affect your credit score either way.
If the account has a monthly maintenance fee and you are not using it, closing makes sense. But if it is free to keep open, there is no downside to leaving it as is.
What happens to linked accounts and services
If you have a savings account, money market account, or credit card linked to the checking account you are closing, those accounts are not affected. The checking account is just a payment method for those products. Once you close the checking account, you straightforward cannot use it to transfer money to or from the linked accounts.
If you have set up bill pay through the checking account, those payment instructions will stop working once the account closes. You will need to set up bill pay again through your new checking account or through the biller's website directly.
If you have a debit card tied to the checking account, that card will stop working once the account is closed. The bank will typically deactivate it automatically, but you can also call and ask them to cancel it when ready if you want to be sure.
Frequently Asked Questions
Will closing my checking account hurt my credit if I have a credit card with the same bank?
No. The credit card is a separate account and will not be affected by closing your checking account. Your credit score is based on the credit card and other credit accounts, not on deposit accounts.
What if I close my checking account and then the bank sends me a bill for fees I did not know about?
Contact the bank when ready and ask them to explain the charges. If the fees were assessed after you closed the account, ask them to reverse them. If you believe the charges are unfair, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov.
Can I reopen a checking account I closed?
Yes, in most cases. If you closed the account in good standing, the bank will usually let you open a new one. If the account was closed due to overdrafts or unpaid fees, some banks may require you to wait a period of time or may refuse to open a new account for you. Ask the bank about their policy before you close.
Does closing a checking account show up on my credit report?
No. Checking accounts do not appear on credit reports at all. They may appear in ChexSystems, which is a separate banking history database, but that is not the same as a credit report.
Should I close old checking accounts I am not using?
Only if they charge monthly fees. If the account is free and has a zero balance, keeping it open costs you nothing and preserves your banking history. If it charges fees, close it after redirecting any automatic payments or deposits.