What happens to my credit score when I apply for a bank account?


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Need a new bank account? Here’s what to expect when it comes to your credit score.

Key points

  • Applying for a new credit card or a new loan can cause your credit score to drop slightly.
  • This shouldn’t happen when you apply for a bank account.

It’s important to do your best to keep your credit score in good shape. The higher this number, the more likely you are to be approved the next time you want to take out a loan or open a new credit card. And if you have a good credit rating, you may qualify for a lower interest rate on a personal loan or mortgage.

Often, applying for a new loan or a new credit card will actually cause your score to drop a little. When asking to borrow money in any capacity, the lender or credit card company will need to verify that you are not taking too much risk. To do this, he will carry out an in-depth investigation of your credit report, which can cause your score to drop by five to 10 points on average.

But what if you request a new bank account? Will it have a similar impact?

In most cases, a bank account application will not result in a thorough investigation of your credit report. You shouldn’t worry about damaging your credit even modestly when looking for a place for your money.

Hard Requests vs Soft Requests

When you open a bank account, you are not asking to borrow money. Instead, you’re just asking for a place to keep the money you already have or hope to earn in the future. As such, banks generally do not thoroughly investigate your credit report when you apply for an account (although in rare cases they may).

Instead, banks perform what is called a soft inquiry. The advantage of a gentle inquiry is that it should not cause damage to the credit score. This is important because if your credit score isn’t at its best, even a modest drop can sometimes cause problems.

Imagine you want to apply for a conventional mortgage. You’ll need a minimum credit score of 620 to go this route (although some lenders may require a higher credit score). If your score is 624, you may not be able to afford a five-point success before submitting this mortgage application. But fortunately, opening a new bank account shouldn’t change your credit score at all.

Can your bank account activity affect your credit?

Generally, applying for and opening a new bank account will not impact your credit score. But if you don’t manage your account well, it could affect your credit.

If you overdraw your account but don’t pay the overdraft fees you owe, it could hurt your credit. The same goes for closing a bank account with a negative balance. However, having a small amount of money in your bank account will not lower your credit score.

A higher credit score could open the door to affordable borrowing options, so it’s important to do your best to keep your score in good shape. This includes knowing what factors will impact that number. Generally speaking, you can open a new bank account without having to worry about any kind of credit rating backlash.

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