Closing a Bank Account and Credit Scores

Q: Are there any negatives to closing a bank account?

If the account is in good standing and you no longer need it, it’s fine to close a bank account. Banks don’t report your banking activity to the credit bureaus. As a result, closing an account won't have a negative impact on your credit, just as keeping an account open won’t have a positive impact on your credit.

Q: Does closing an account help or hurt your credit score?

Typically, closing a bank account will neither help nor hurt your credit score. Just make sure that you have settled any pending or outstanding charges so you don't run the risk of having a negative balance being sent to collections (which could impact your score).

Q: When should you close a bank account?

You might want to close a bank account if you’re unhappy with the bank’s customer service, you’re getting hit with monthly fees, and/or you can get a higher annual percentage yield (APY) on your deposits at a different bank.

Does Closing a Bank Account Hurt Your Credit?

Dan MillerUpdated February 28, 2023

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If you are looking to close a bank account, but worry that it might have a negative impact on your credit score, you can rest easy. Closing a bank account will not have any direct impact on your credit. However, it can have indirect effects on your credit that you'll want to be aware of before you close your bank account.Here’s what you need to know to close a bank account seamlessly and without having any negative repercussions on your personal credit.

Why Close a Bank Account?

There are numerous reasons why you might want to close a bank account. Some of the most common include:

You’re moving
You’re unhappy with the customer service
You’re being charged expensive fees
You opened it earn a new account bonus and now no longer need it
You found a bank that offers a higher annual percentage yield (APY)
You’re opening a joint account
You have too many bank accounts and want to consolidate

Regardless of your reasons, there are some steps you’ll want to take to make sure you close your account correctly and don’t inadvertently impact your credit.Recommended: What Happens When the Bank Closes Your Account

How Do You Close a Bank Account?

The exact process for closing a bank account will depend on your bank. Some banks allow you to close your account online, while others require you to call customer service or go into a local branch. In some cases, you’ll need to submit a written cancellation request or fill out an account closure request form. You can typically find instructions for closing an account on your bank’s website.Keep in mind that once you close a bank account, you typically cannot reopen it again.Recommended: Guide to Opening a Savings Account Online

Do Banks Give Information to Credit Reporting Agencies?

No. Banks do not report your bank account information or activity to the three major consumer credit bureaus — Equifax®, TransUnion®, and Experian®. So information about what savings accounts or checking accounts you have, the balances in those accounts, or any account closures don’t show up on your credit report.

Does Closing a Bank Account Hurt Your Credit Score?

Because your credit score is calculated based on information in your credit report, and bank accounts don’t show up on your report, closing an account doesn't have any direct impact on your credit score.However, you could run into difficulty if you close an account with a negative balance (due to an overdraft or any unpaid bank fees). If the bank chooses to send this debt to a third-party collection agency, that agency may report it to the credit bureaus. If you end up with a collection account on your credit report, it can have a negative impact on your score.However, as long as you settle any balances, stop all debit or automatic withdrawals from your account, and wait until all outstanding checks have cleared, closing a bank account should not hurt your credit score.Recommended: Does Getting a New Credit Card Hurt Your Score?

Protecting Your Credit Score When Closing a Bank Account

These simple steps can help you close a bank account without any hiccups, headaches, or damage to your credit.

Updating Automated Payments

If you have autopay set up for any credit cards or other accounts, you’ll want to update those accounts so payment will come from a different or new account before closing your old bank account. If you miss a credit card payment due to closing the account, that can end up having a negative impact on your credit.Recommended: Stopping Automatic Payments From Checking

Checking Your Payroll Direct Deposit

If you regularly receive your paycheck via direct deposit, you’ll need to reach out to your company's HR or payroll department and ask how to change your direct deposit account. Direct deposit changes often take one to two pay periods to kick in, so you’ll want to keep your old account open until you see a paycheck go into your new account.

Transferring Your Money

Before you move money out of your account, you’ll want to make sure all outstanding checks or payments have cleared. If you bring the balance to $0 and a payment goes through, you’ll end up with a negative balance and could end up paying hefty overdraft fees. Once you've confirmed there won’t be any surprise transactions, it’s fine to transfer your funds to your new account. If your bank account has a minimum balance requirement, consider only transferring money out of the account right before you close it so that you’re not charged a monthly maintenance fee.

Closing Your Account

Once you’re sure there are no pending transactions and the account has a positive or $0 (not a negative) balance, you can close your account. You might be able to complete the closure online, or you may need to fill out a mail-in form, visit a branch, or call customer service to close your account. If there is any money in your account when you close it, the bank will typically issue you a check.Recommended: How to Switch and Change Banks

The Takeaway

If you want to switch to a new checking or savings account and close your old one, you can do so without worrying that it will negatively impact your credit. Banks don’t report your account activity (including account closures) to the credit bureaus. Just be sure to pay off any outstanding balances and fees before you shut your account down, or you could end up with a debt in collections — which could impact your credit. If you’re on the hunt for a new savings account (or looking to earn more than average savings account interest rate), Lantern by SoFi can help. With our online banking marketplace, it’s fast and easy to compare high-yield savings accounts based on annual percentage yield (APY), fees, and balance minimums. Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

Are there any negatives to closing a bank account?

Does closing an account help or hurt your credit score?

When should you close a bank account?

Photo credit: iStock/anyaberkut

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About the Author

Dan Miller

Dan Miller is a freelance writer who's spent nearly a decade covering developments, trends and advances in the finance space. His expertise extends across financial sectors including personal finance, student loans, budgeting, credit cards and mortgages. Miller's work has been featured on sites such as NerdWallet, Forbes, Business Insider, Rocket Mortgage and Intuit Mint.

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