Does Closing a Checking Account Affect Your Credit Score?

Checking accounts are handy and a very common type of account for most people. If you need or want to close a checking account for any reason, you may be concerned that this will impact your credit score.

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Some say it has no impact, while others claim it can damage your credit rating. You may be trying to figure out how to rebuild credit after debt settlement and how closing a checking account will be viewed by creditors. So, what is the truth? 

Each Situation Is Different

Closing a checking account can impact your credit score, though the specific effect will depend on your financial situation.

No Significant Impact

If you have a positive history with the account and maintain a good relationship with the bank, closing it may not significantly impact your score. If you're in good standing and have no outstanding balances, you may not see a significant dip.

Negative impact

If you have a history of overdrafts or missed payments, closing the account could lead to a drop in your score. When you close a checking account, the bank will report the account as "closed by the consumer" to the credit bureaus. This notation will stay on your credit report for up to seven years and may negatively impact your score.

Also, if you have outstanding checks or unpaid fees when you close the account, this will be reported to the credit bureaus and could lead to a drop in your score. Closing an account you've had for a long time could shorten your credit history and lead to a lower score.

The impact of closing a checking account on your credit score will vary depending on your individual situation, so it’s important to weigh the pros and cons before closing your account. 

How to Fix a Debt Settlement Issue

Debt settlement can be a tool to help you get out of debt and improve your financial situation. You can rebuild your credit after debt settlement by following these five steps:

1. Get on a Budget

The first step to rebuilding your credit is getting on a budget. You need to find a way to live within your means and ensure you're not spending more than you bring in each month. This will help you get a handle on your finances and start to pay down your debt.

2. Pay Your Bills on Time

One of the most important things you can do to rebuild your credit is to start paying all of your bills on time. This includes your mortgage, car payment, credit cards, and any other bills you may have. Late payments can stay on your credit report for up to seven years, so it's important to pay on time.

3. Pay Down Your Debt

Once you've gotten on a budget and are making all of your payments on time, you can start to pay down your balances. Start with the account with the highest interest rate and focus on paying that off first. As you pay down your debt, your credit score will improve.

4. Use Credit Wisely

After you've made strides in paying down your debt, it's important to keep using credit wisely. This means using your credit cards for purchases you can afford to pay off in full each month in order to keep your balances low. Using credit wisely will help you maintain a good credit score and improve your financial situation.

5. Monitor Your Credit Report

Keep an eye on your credit report so you can see the progress you're making. You're entitled to one free credit report per year from each of the three major credit bureaus. Check your report regularly to ensure there are no errors or unusual activity, too.

Example of Larger Creditor Reporting

If you’re a member of the Navy Federal Credit Union, you may wonder when does Navy Federal report to credit bureaus. This large, global credit union reports account information to the credit bureaus monthly. 

Your payment history will also be reported monthly if you have a Navy Federal Credit Union loan. Therefore, it's important to make all your payments on time to avoid negative marks on your credit report.

Auto loans are also typically reported to all three credit bureaus (Experian, Equifax, and TransUnion). If you are curious as to which credit bureau is most used for auto loans, Experian is usually the go-to, because it has a specific score designed for auto lenders called the FICO Auto Score.


Closing your checking account can have an impact on your credit score, depending on your individual situation. If you had debts in the account that are not settled, closing the account could lead to a significant drop in your score. However, if you have a positive history with the account and the bank, you may not see a huge impact on your score.

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