Does My Banking Activity Affect My Credit Score?

SEP 09, 2014

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Most people keep their money in the bank, whether in in a checking account, savings account or certificate of deposit. Most of the time, what you do with your bank account won’t show up on your credit report. However, there are certain instances when it can impact your credit score.

Opening Bank Accounts
Opening a new checking account could have an impact on your credit score. That’s because some banks pull your credit report before allowing you to open a new account.  For instance, when you go to open a checking account, the bank may pull your credit score which may result in a “hard inquiry” on your credit report. According to Experian, these types of inquiries may lower your score slightly, but will never be the only reason youre denied credit. Inquiries also stay on your credit report for approximately two years, so theyre not a permanent fixture there.

Overdraft Protection
Some banks offer overdraft protection, which allows you to withdraw funds for more than the balance in your account. Depending on your bank, it may report your overdraft protection amount as a line of credit, which would show up on your credit report. If you withdraw funds for more than your balance and don’t pay back the money to the bank, the bank may turn it over to a collection agency, which will report it to the credit bureaus as a debt you are late in repaying.

Monitoring Your Credit
Whether you’re curious as to how your bank is or isn’t reporting your accounts to the credit bureaus, or just interested in keeping tabs on your credit score, checking your credit report and score regularly can help you understand what affects your credit score and how it impacts your life. In addition, making on-time payments on your lines of credit is one of the best ways to keep your credit healthy ”something that staying connected with your credit can show over time.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from, Inc., an Experian company. © 2014, Inc. All rights reserved.