A lot of factors go into determining your credit score, from how timely you pay your bills to how much credit you have available. Even if you’re familiar with all the factors, it’s understandable if you’re not sure whether a financial action, such as opening up a new checking account, can affect your credit score.

The Short Answer

For most people, the answer to the question “Will getting a checking account affect my credit score?” is “Not at all.”

Credit scores are focused on factors like how much debt you have and how reliably you repay it, so usually getting a checking account won’t affect your credit score one way or the other.

However, there are indirect ways with how you manage the money in your checking account can affect your credit score. 

How Overdraft Protection Can Affect Your Credit Score

If you apply for an overdraft protection line of credit from a financial institution while you're opening a checking account, the institution will likely run a hard credit inquiry on you. This is because an overdraft protection line of credit is a small loan that will cover the amount you’ve spent. It is money you will have to repay when used.

This could knock a few points off your credit score, but only in the same way your credit score decreases if you apply for any other loan. This decrease in your credit score is also not going to be permanent, and you may well feel that having your credit score temporarily decreased is worth it for the peace of mind overdraft protection can bring.  

Additionally, if you fail to make on-time payments on your overdraft protection line of credit when a balance is owed, as with any other loan or credit card, you're credit score will be negatively affected. So make sure if you do have an overdraft from your checking account that you pay back the balance as quickly as possible.

Indirect Effects of a Checking Account on Your Credit Score

You should also be aware that while getting a checking account won’t directly affect your credit score, it might indirectly affect your credit score, for better or for worse.

On one hand, many lenders will require that you have a checking account when you’re applying for a loan, a mortgage or a line of credit, all of which will increase your credit score if you use them judiciously and make your payments on time.

Checking accounts can also help you to organize your finances, and you can use services such as electronic bill pay to ensure that your bills are paid on time, which is key to maintaining a good credit score.

On the other hand, the more checking and savings accounts you have, the harder it is to keep track of them, especially if you have accounts at multiple financial institutions. If you’re not aware of what’s going on in all your accounts, you’re more likely to miss a bill payment. You’re also more vulnerable to identity theft, which can wreck your credit if collections agencies start trying to get you to repay the debts thieves racked up in your name.

Get a Checking Account at First Alliance Credit Union

Most of the time, getting a checking account will have no effect on your credit score. The only way a checking account will impact your credit score is if the financial institution this through by indirect means.

If you want to open a checking account, become a member of First Alliance Credit Union today. It only costs $5 to open an account, and you can access your account at any time thanks to our robust online banking platform and mobile app.