Does Opening a Bank Account Affect a Credit Score?

Your credit score is a three-digit number that comes directly from the information on your credit reports. To determine your score, FICO and the credit bureaus look at the number and type of credit accounts you have open, their balances and credit limits and whether you make your payments on time. Opening bank accounts has some influence, too.

Positive Effects

Creditors view a bank account as a positive sign, according to Liz Pulliam Weston, a writer for MSN Money. A savings or checking account indicates that you are financially stable. Opening an account is an important step in establishing credit because of its positive influence on credit reports, even though it does not affect a credit score directly if it is in good standing.

Negative Effects

Court judgments that affect you financially hurt your credit score. Such judgments happen if you default on a loan or credit card account and the lender sues to force payment. You may also face a credit-affecting judgment if you bounce checks on your bank account and do not repay the owed amounts. First the bank might turn you over to a debt collector, which adds a collection agency to your credit report and drops your score. The score goes down even further if there is a successful lawsuit to recover the money.

Considerations

The process of opening a bank account may have a slight negative affect on your credit score. Some banks check your credit reports prior to opening a new account. Their check is a "hard inquiry," which is visible on your reports to other lenders for the next two years. MyFICO explains that such an inquiry can drop your score by up to five points. This minor amount may not hurt you if you already have a high score, but it can make a big impact if you are borderline between a fair score and subprime.

Time Frame

Pulliam Weston says minors can use bank accounts to establish good financial records as they approach adulthood. Young people with no credit history often face difficulty getting credit cards or loans. Opening a bank account at a young age builds a history of financial stability that makes it easier to open credit accounts later. The bank where you have your account is more likely to extend credit to you if your savings or checking account has always been in good standing.