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Does Changing Banks Affect Your Credit Score?

Changing banks can be challenging, but it doesn’t have to affect your financial life. Have you ever wondered, "does switching banks affect credit score?" We have all the answers you need in this guide.

Woman on Phone Looking at Debit Card

How Does Changing Banks Affect Your Credit Score

Does switching banks affect your credit score? The short answer is no. According to My Fico, only information about your credit accounts will influence your credit score. Your credit report does not show the banking history of your checking and savings accounts, so switching banks will not affect your score. The information that will be included in your credit report is:

  • Personal information relating to your banking accounts, including your social security number.
  • Account information and credit history.
  • Credit inquiries.
  • Public records and collection accounts.

Although you can change banks without a great credit score, it’s still important that you improve your credit score. A bad credit score can have a negative impact on your financial life. FICO is one of the credit bureaus that provides your credit score with a three-digit number. When you want to borrow cash, the lender (your bank) will check your credit score before approving a loan. The higher the score, the more likely you will succeed in obtaining a loan and the lower your interest rates. Without a good credit score, you won’t be able to buy a home or finance that new car you've always wanted.

When Closing a Bank Account Can Hurt Your Credit

There is a catch. When you close your account with a negative balance without switching your debit payments over to a new account, you may find a third-party collection agency calling you to collect debts that you owe. The collection agency can report you to the credit bureaus, which will likely affect your credit score. It’s, therefore, important to set up your new bank account and move your debits over as soon as possible to your new accounts before closing your old bank accounts.


How Hard Is It to Switch Banks if You Have Bad Credit

When you open an account, most banks (including FNCB Bank) will use a consumer reporting agency called ChexSystems to review your previous bank account activity. Your previous activity will determine if you can open a new checking account. ChexSystems looks for signs of fraudulent activity or account abuse on your name. It does not report on your credit history, so you’ll be able to switch banks as long as you have a good ChexSystems record. You can receive a free copy of your ChexSystems record every 12 months. Be sure to review your record and address any issues you may have before opening a new bank account.

Follow these tips to maintain a good ChexSystems record:

  • Pay all bank fees on time.
  • Sign up for overdraft protection.
  • Always check your account before writing a check or making a payment to ensure you have the necessary funds.
  • Turn off automatic recurring payments on your old accounts before closing them.
  • Regularly check your ChexSystems report to ensure it is free of errors.

Why Is FNCB Bank One of the Best Banks to Switch To

FNCB Bank reviews your ChexSystems record, which makes it easier for you to open an account if you have a good score. We also believe in second chances, and our Opportunity Checking is designed to give you a fresh start from past financial mistakes and a chance to rebuild your credit. This safe, affordable account is BankOn Certified.

FNCB Bank also helps you maintain a good ChexSystems record and credit score by providing you with overdraft protection. We automatically transfer funds from your FNCB Bank savings account to your FNCB Bank checking account when needed to help you avoid an overdraft.

Once you set up your account and have built up your credit history, you’ll also have access to our array of loans. Whether you are a homeowner looking for a home equity line of credit or a new business owner looking for start-up capital, we can help you to obtain the funding you need.

Switch Using FNCB Bank Account Switch Kits

Switching banks has never been easier with our FNCB Bank switch kit. We will help make your transition to a new FNCB Bank account quick and easy. Contact our team to learn more about our switch kit. Visit our blog for more information on topics like "does switching banks affect credit score?"

Our Mission: To make your banking experience simple better.

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