Closing a checking account does not directly damage your credit score
Closing a checking account by itself will not lower your credit score. Credit bureaus — the companies that track your credit history — do not monitor checking accounts at all. They only track credit products: credit cards, loans, mortgages, and lines of credit. A checking account is a deposit account, not a credit account, so it never appears on your credit report.
That said, the reason you are closing the account can matter. If you close it because you are moving money to avoid paying a debt, or if the bank closes it because of unpaid overdraft fees, that can create problems. But the act of closing the account itself is invisible to your credit score.
Key Takeaways
- Closing a checking account does not appear on your credit report because checking accounts are not credit products.
- Your credit score is based only on credit accounts like credit cards and loans, not on deposit accounts like checking or savings.
- If a bank closes your account due to unpaid overdraft fees or fraud, that negative mark may affect your ability to open accounts at other banks.
- Closing a credit card account can hurt your score, but closing a checking account cannot.
Why checking accounts do not show up on credit reports
Credit bureaus track how you handle borrowed money. A checking account is money you deposited yourself — it is your own cash, not credit. Because there is no loan or credit line involved, the account never gets reported to the three major credit bureaus: Equifax, Experian, and TransUnion.
Your bank may keep its own internal record that you closed the account, and that record stays in a system called ChexSystems. ChexSystems is separate from credit bureaus. It tracks checking and savings account history, not credit history. If you close an account in good standing, it will not hurt you at ChexSystems either.
When closing a checking account could create problems
The closure itself does not hurt your credit, but the circumstances around it might. If your bank closes your account because you owe money — unpaid overdraft fees, for example — that negative mark goes into ChexSystems. Other banks can see it when you try to open a new account, and some will refuse to let you open one.
If you have a credit card through the same bank and you close the checking account as part of closing all your accounts with that bank, closing the credit card could hurt your score. But again, the checking account closure is not the problem — the credit card closure is.
If you are closing the checking account to avoid paying a debt you owe, that debt does not disappear. The creditor can still report it to credit bureaus, and that will damage your score. The account closure does not protect you.
The difference between closing a checking account and closing a credit card
Closing a credit card can lower your credit score because it reduces your total available credit. If you had a $5,000 limit and you close that card, your available credit drops by $5,000. Credit bureaus see this as a negative change and your score may fall.
A checking account has no credit limit and no available credit, so closing it does not trigger this effect. You can close ten checking accounts and your credit score will not move.
What happens in ChexSystems when you close an account
ChexSystems is a banking history system, not a credit system. When you close a checking account in good standing, the closure is recorded but it does not hurt you. Banks use ChexSystems to see whether you have a history of bounced checks, fraud, or unpaid fees.
If you closed the account because you moved banks or consolidated accounts, that is normal activity and banks expect to see it. If you closed it because the bank closed it due to unpaid overdrafts, that is a red flag. Some banks will deny you a new account if they see a recent involuntary closure, though policies vary by bank.
You can request your ChexSystems report for free once per year at www.chexsystems.com. If there is an error on it, you can dispute it the same way you would dispute an error on a credit report.
Steps to close a checking account without complications
To avoid any issues, pay off any outstanding balance or overdraft fees before you close. Contact your bank and ask what the process is — some banks let you close online, others require a phone call or a visit to a branch. Ask whether there are any fees for closing early.
Make sure you have moved any automatic payments or direct deposits to your new account before the old one closes. If a payment bounces because the account is closed, that can create a debt that does get reported to credit bureaus.
After you close, keep an eye on your mail for any statements or notices. If the bank sends you a bill for unpaid fees after closure, pay it promptly. If you do not, it can be sent to a debt collector and reported to credit bureaus.
Frequently Asked Questions
Will closing my checking account show up on my credit report?
No. Checking accounts do not appear on credit reports at all. Credit bureaus only track credit products like credit cards and loans. Your bank may record the closure internally, but it will not be visible to lenders or credit scoring companies.
Can closing a checking account lower my credit score?
Closing the account itself cannot lower your score. However, if the bank closes it because you owe unpaid fees, or if you close it to avoid paying a debt, that can create problems that do affect your score. The account closure is not the issue — the unpaid debt is.
What is ChexSystems and does it affect my credit?
ChexSystems is a separate system from credit bureaus. It tracks your checking and savings account history. A normal account closure does not hurt you in ChexSystems, but an involuntary closure due to unpaid fees or fraud will be recorded and may make it harder to open accounts at other banks.
Should I close my checking account if I am trying to improve my credit score?
Closing a checking account will not help or hurt your credit score. If you are trying to improve your score, focus on credit products: paying down credit card balances, making loan payments on time, and keeping old credit accounts open. The checking account does not factor in.
What should I do before closing my checking account?
Pay any outstanding fees or overdraft balances, move automatic payments and direct deposits to your new account, and confirm the bank has no holds on the account. After closure, watch for any bills or notices. If the bank sends you a bill for unpaid fees, pay it to avoid debt collection.