Can Closing Bank Accounts Have An Effect On Your Credit? | Refresh Financial
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Can Closing Bank Accounts Have An Effect On Your Credit?

 Can Closing Bank Accounts Have An Effect On Your Credit?

Throughout this past week, we've talked a lot about the age of your credit, and that closing older accounts can actually hurt your credit score. But what about things like a chequing or savings account? Can closing bank accounts have an effect on your credit? Like most credit-related questions, the answer depends on circumstance.

Your Account Standing

If you're closing a bank account that is in good standing, there is no reason that it should affect your credit score. You can freely move to a different financial institution, or relocate to another part of the world. Closing and moving accounts that are in good standing will not hurt your score.

Bank accounts are sort of like utility bills in the sense that they do not report to the credit bureaus unless they're in bad standing. If you have a negative balance and are not making payments, this can begin to appear on your credit report. If what you owe on your closed account has gone to collections, you can be sure that this will drag your credit score down.

To Summarize

If your accounts are empty and you don't owe anything, you're in the clear, but an overdrawn account can show up on your credit score. When looking at closing your bank account, ensure that you don't owe anything and that they're in good standing.

If you've damaged your credit score due to closing overdrawn accounts, there's no need to panic. With Refresh Financial's credit building programs, boosting your score has never been easier! Click here for more information on how to build your score with Refresh's credit builder programs.

Have you ever faced credit issues when closing bank accounts? Let us know in the comments!

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