It’s a standard question on credit applications: Do you have a checking or savings account?
But how much does having (or not having) those accounts really affect your credit score?
The surprising answer is: Not at all.
It makes no difference to FICO or the credit bureaus whether you have seven checking and savings accounts or none at all. The only time that your checking account will affect your credit score is if you bounce checks and do not pay the money back. If the balance you owe your bank gets turned over to a collection agency, then that information will show up on your credit report.
The checking and savings accounts themselves do not show up on your credit report. When you bounce a check it only shows up on your credit report if it goes to collections. When that happens, your credit score will drop.
One warning: If you bounce checks and do not repay your bank, you will not be able to open a checking account at another bank for five to seven years. When you open a checking or savings account most banks use the CHEX System to see how you have treated other banks in the past. If your name comes up on that list, no account for you.
So, if having a checking or savings account has no bearing on your credit scores, why do lenders ask that question when you fill out a credit application?
An open checking account is a mark in your favor – if it’s open, with a positive balance, then it shows that you have the basics of managing your money under control. If you have a savings account then presumably, it shows you are planning for your future.
Other reasons lenders want to know you have a checking and savings account:
- So that you can pay them easily with a check or electronic draft.
- It helps verify your income since all of your deposits are recorded.
- If you regularly use checks to pay your bills, then you can show them to a prospective lender. This is especially important if you have bad credit. Being able to take in a year’s worth of checks showing on-time payments on your car or mortgage will help you get a loan.
So, in conclusion, having a checking account or savings account does not affect your credit score – but it could still help get you a loan if you can use it to show that you have made regular, on time payments to your lenders.