The credit score is precious for all of us. After all, it gets us the perks that we want! Moreover, people with high credit scores can even get trips abroad. But that only happens if you have saved these points. Most people ask, "Does closing a bank account hurt your credit?". This question is quite fundamental but significant to get answers to.

On top of that, we should also know the factors that can ruin or make your credit score. For somebody with zero knowledge, this article will be a treasure. In this article, we have cleared all your assumptions and answered the significant questions regarding bank accounts and credit points. Furthermore, we have also mentioned the factors that can hurt your credit score. So, let's cut to the chase and start.

Does Closing a Bank Account Hurt Your Credit?

No, closing a bank account does not hurt your credit. But this question is not that simple. Because it still depends upon a few factors that can hurt your credit. For example, does the account you are closing have a negative balance? This kind of question matters when we discuss credit points.

To explain the process in layman's language, credit bureaus keep track of your credit score. Moreover, these bureaus don't care about you closing your bank accounts. What they do care about is if you have a negative balance. This is because banks will forward this information to debt-collecting agencies.

Afterward, they will deliver your negative balance info to the credit bureaus. Once they have your data on a negative balance, that is when your credit will be hurt. On top of that, you might get into some trouble with that negative balance.

So, the bottom line is that you can close your bank account if you don't owe anything to the bank. Your balance is not negative. Moreover, your standing in the bank is alright. The three credit bureaus only collect information about your bank account if your account balance and standing in the bank are negative.

Is It Bad to Close a Savings Account?

Do you have two savings accounts and want to get rid of one? Are you getting better interest rates and want to switch banks? Then don't freak out. As a newbie, you must think that closing a savings account is terrible.

Moreover, I used to think that there were some separate rules for closing a savings account. Besides, my credit will get hurt if I close the savings account. But it turns out to be a myth! Because you can close your savings account like a regular account. Furthermore, The same rules discussed above for the standard account also apply to the savings account.

If you have some funds remaining in your savings account, you can ask the bank to transfer them to your new account. The process would be smooth only if your account has a good standing in the bank. Otherwise, you might have to face some difficulties. Other than that, you are good to close and open new savings accounts.

Top Factors That Affect Your Credit Score

Now, when your concern "Does closing a bank account hurt your Credit?" is cleared. You should know more about your credit score and the factors that can hurt your credit score. Further, we have discussed a few factors that affect credit scores.

1. Opening Multiple New Credits

The first thing that affects your credit is opening new credit repeatedly. This is considered suspicious, and therefore, it can hurt your credit score. The reason is that when you apply for new credit, an inquiry is generated. That inquiry is called a hard inquiry.

Moreover, multiple hard inquiries in a short period are considered harmful. This won't completely wreck your credit score, but it will have a slight impact. So make sure that you don't do that.

2. Your Line of Credit History

The next factor affecting your credit is directly related to your credit history. This means how long ago your account was opened. On top of that, how long has your account been used and active? These factors also add to it. Further, if you have a credit account for a more extended period, this can be advantageous and vice versa.

3. Your Payment History Matters

Another significant factor that can wreck your credit score is your payment history. For people who don't make payments on their credit accounts punctually, the impact is negative on their credit. On the other hand, making payments timely and taking care of that side will result in your favor.

4. Linked Accounts Can Affect Credit

One thing that most people don't know about is having a linked account with somebody can affect your credit. Suppose that you have a connected account with your wife or somebody else. Your credit will also be affected when that person's credit score declines due to their doings. That is because you both have a connected account.

5. Using Multiple Types of Credits

As discussed earlier, creating a new credit now and then can hurt your credit. On the other hand, making credits of different types can positively affect your credit. For example, if you get credit cards along with installment loans and other types of credit, it will only affect your credit positively.

Therefore, try getting a mix of different credit types to open new credits quickly. This will help you in your favor rather than making a new credit of the same sort. Most people with knowledge of how credit works use a mix of different things to make it work in their turn.

Final Thoughts

Most people have this similar question: "Does closing a bank account hurt your credit?". The answer is no, and it does not hurt your credit if you have a good standing in the bank. Besides that, if you have a negative balance, that can affect your credit negatively. We have discussed it thoroughly in the article, along with a few factors that affect credit.