Can Canceling a Bank Account Affect Your Credit Score?

A credit score is a number that shows lenders what your past performance using credit has been and how safe or risky a borrower you are. Though there are a variety of factors that influence a credit score, your banking accounts are not typically among them. Closing an account won't lower your credit score automatically, though it might do so if the account influences other credit score factors.

Credit Score Factors

A credit score represents your past history using credit. Potential creditors want to know if you're likely to repay your loans on time or if you're a risky borrower. To calculate your score, credit score companies look at several key factors, including your past history of timely or late payments, the total amount of debts or number of loans you have, the types of loans you have, how long you've had your loans and how many new loans you have.

Bank Account

Your credit score does not take several factors directly into account even though they may affect your ability to use, obtain or pay back credit. Credit reports do not include how much money you have in your bank account, what your income is or what kind of assets you have. Closing a bank account, therefore, does not directly impact your credit score.

Payments

While closing a bank account won't affect your score directly, you can indirectly affect your score if closing the account affects any of the credit score factors. For example, if you've signed up for an automatic bill payment system that takes money directly out of your bank account each month to pay a bill, and you then close the account without making other arrangements for paying, this can lead to a late payment and lower your credit score.

Other Considerations

Closing your account won't of itself affect your credit score, but if you're thinking of applying for a loan, you may want to keep your account open. According to Kimberly Lankford, writing for Kiplinger's Personal Finance, borrowers with little credit history who apply for a new loan may need to provide lenders additional information to secure a loan. The lender may look at your past banking activity in addition to your credit report, and having a bank account that shows you can manage your money well may help you.