Closing a checking account does not directly damage your credit score
Closing a checking account has no impact on your credit score because banks do not report checking account activity to credit bureaus. Your credit score is built from credit history — borrowed money you paid back or did not pay back. A checking account is a deposit account, not a credit account. The three major credit bureaus (Equifax, Experian, and TransUnion) do not track whether you have a checking account, how much money is in it, or whether you close it.
That said, closing a checking account can create problems that do affect your credit if you are not careful about the timing and what you owe. The damage comes from what happens during the closure, not from the closure itself.
Key Takeaways
- Checking accounts are not reported to credit bureaus, so closing one will not change your credit score directly.
- Bounced checks or overdraft fees that go unpaid can be reported to ChexSystems or sent to collections, which harms your credit indirectly.
- If you close an account with an outstanding balance or pending automatic payments, you risk late payments on bills tied to that account.
- Closing a checking account has no effect on credit cards, loans, or other credit products linked to that bank.
When closing a checking account can hurt your credit indirectly
The real risk is what you leave behind when you close the account. If you have an outstanding overdraft balance — money the bank lent you to cover a check or debit card transaction — and you do not pay it back before closing, the bank can send that debt to a collections agency. A collections account on your credit report will lower your score significantly.
Automatic payments set up on that checking account are another trap. If you close the account without redirecting those payments to a new account, the payments will fail. Your utility bill, insurance premium, loan payment, or credit card payment will bounce. Late or missed payments are reported to credit bureaus and damage your score. This is especially dangerous if you have automatic payments on a credit card or loan — missing even one payment can drop your score by 100 points or more.
A third scenario involves ChexSystems, a banking history database separate from credit bureaus. If you leave an account with a negative balance or unpaid fees, the bank may report you to ChexSystems. While ChexSystems itself does not calculate a credit score, a negative ChexSystems record can make it hard to open a new checking account, and some lenders check it before approving credit.
How to close a checking account without damaging your credit
Before you close the account, spend two to four weeks making sure no money is owed. Check your account statement for any overdraft balance or pending fees. If there is a balance due, pay it in full before you submit the closure request.
Next, identify every automatic payment or recurring charge tied to that account. Log into your online banking and look at the last three months of transactions. Search for subscriptions, insurance payments, loan payments, utility bills, and any other regular transfers. Contact each company or log into their website and change the payment method to a new checking account or credit card before you close the old account.
Give yourself at least one full billing cycle after you have redirected all payments before you close the account. This buffer lets you catch any payments that still try to process from the old account. Once you are certain nothing is pending, you can close the account in person at a branch or by phone or mail, depending on the bank.
What happens to linked credit products when you close a checking account
Closing a checking account does not close any credit cards, loans, or lines of credit tied to that bank. If you have a credit card from the same bank, that account stays open and active. Your credit history on that card is unaffected. The same is true for auto loans, mortgages, or personal loans from the same lender.
However, if you have set up automatic payments on a credit card or loan using that checking account, you must redirect those payments before closing. A missed payment on a credit product will be reported to credit bureaus, even if the miss was caused by a closed checking account. The bank will not excuse the late payment because you closed the account — you are responsible for ensuring payments continue.
The difference between closing an account and leaving it dormant
Some people close a checking account because they are not using it. Others simply stop using it and leave it open. From a credit perspective, there is no difference — neither action affects your score. However, leaving an account open can cost you money in monthly fees if the bank charges a maintenance fee on inactive accounts. Closing it eliminates that fee.
The downside of closing is the work involved in redirecting payments and the risk of missing something. The upside is that you stop paying fees and simplify your banking. If you are certain you will not use the account again and you have time to redirect all payments safely, closing is the better choice.
Frequently Asked Questions
Will closing a checking account lower my credit score?
No. Checking accounts are not reported to credit bureaus. Closing one has no direct effect on your credit score. Damage only occurs if you leave unpaid overdraft fees or miss payments on credit products because you did not redirect automatic payments in time.
Can a bank report a closed checking account to credit bureaus?
No. Banks report closed checking accounts to ChexSystems, a banking history database, not to credit bureaus. ChexSystems does not calculate a credit score, but a negative record can make it harder to open a new checking account elsewhere.
What if I close my account and a payment bounces?
The company trying to collect the payment will attempt to reprocess it. If it fails again, they may charge you a returned payment fee and report the missed payment to you. If the payment was for a credit product like a credit card or loan, the late payment will be reported to credit bureaus and will lower your score.
Does closing a checking account affect my credit card from the same bank?
No. Your credit card account is separate from your checking account. Closing the checking account does not close the credit card or change your credit history on it. Make sure you redirect any automatic payments on the credit card to a different checking account before you close the old one.
How long does it take to close a checking account?
Most banks close accounts within one to five business days of your request. Some may hold the account open for seven to ten business days to process any pending transactions. Ask your bank for their specific timeline when you submit the closure request.