a broken bank
September 24, 2007 8:04 AM Subscribe
Credit Scores: Any reason to keep a bank account open?
After being a customer for close to 10 years, I've decided to depart a certain well known, albeit poorly managed national bank.
My question is this: Will closing this account affect my credit scores? Is the length of time you've had a certain bank account a factor for credit scores and lending decisions?
Thx!
After being a customer for close to 10 years, I've decided to depart a certain well known, albeit poorly managed national bank.
My question is this: Will closing this account affect my credit scores? Is the length of time you've had a certain bank account a factor for credit scores and lending decisions?
Thx!
Best answer: I don't think non-credit/non-collection accounts are taken into consideration. Unless you had an overdraft line attached to the account, it shouldn't affect your score one way or the other.
Even if I'm wrong and they are a part of the secret formula, if you have other well-aged credit lines the ding to your credit shouldn't be large, or long-lived.
posted by EmptyK at 8:49 AM on September 24, 2007
Even if I'm wrong and they are a part of the secret formula, if you have other well-aged credit lines the ding to your credit shouldn't be large, or long-lived.
posted by EmptyK at 8:49 AM on September 24, 2007
What do you mean by "account"? Checking/DDA? Credit card? Home equity line of credit?
Credit reports list accounts where you have the ability to borrow money. If you had such an account there, it will hang around in your report with a zero balance for a while before dropping off. Leaving shouldn't hurt--having a new promptly-paid line in the report without the total balances going up too much might even make you look better.
The 'date open' on your account, if it was being reported, will eventually go away, making your history appear a bit shorter, but this happens to lots of people, what with banking and department store mergers.
Checking account reporting is handled separately. I don't have as much experience there, but it's not likely a part of credit scoring unless you get collections or judgments reported against you. The only way it's likely to affect you is if you try to write a $300 check on a brand new account at a convenience store at 2:00 a.m.
Overall, I think you'll be just fine.
posted by gimonca at 8:55 AM on September 24, 2007
Credit reports list accounts where you have the ability to borrow money. If you had such an account there, it will hang around in your report with a zero balance for a while before dropping off. Leaving shouldn't hurt--having a new promptly-paid line in the report without the total balances going up too much might even make you look better.
The 'date open' on your account, if it was being reported, will eventually go away, making your history appear a bit shorter, but this happens to lots of people, what with banking and department store mergers.
Checking account reporting is handled separately. I don't have as much experience there, but it's not likely a part of credit scoring unless you get collections or judgments reported against you. The only way it's likely to affect you is if you try to write a $300 check on a brand new account at a convenience store at 2:00 a.m.
Overall, I think you'll be just fine.
posted by gimonca at 8:55 AM on September 24, 2007
I have accounts in a similar position to yourself, and although the credit scoring was a thought in my head (although unquantified and unquestioned) I decided to leave the accounts open purely because it would - hopefully - mean that I don't have to go through the whole rigmarole of providing ID etc. if I ever want to open an account with those banks at some point in the future.
posted by Chunder at 9:17 AM on September 24, 2007
posted by Chunder at 9:17 AM on September 24, 2007
Best answer: I don't know about the credit score aspect, but I would recommend closing the account. I inadvertently left an account open in California from my college days when I moved back to Missouri, and didn't keep track of it as well as I should have - it had less than $100 in it.
Sure enough, I suddenly received collection notices from California businesses, and someone had managed to get checks for this dormant but still open account. The only thing I can figure out is that someone got my old PO Box and received some notice about ordering checks and started a new set. Anyway, there was absolutely no protection at the merchant level - they accepted checks signed Nicole when my name is Nick. The bank was also no help, they just kept charging overdraft fees on the bouncing (and obviously forged) checks.
It was a struggle for over a year to get everything lined out, and despite all the effort it still dinged my credit score, as the collectors are not helpful in that situation either. Close it up, save yourself the potential hassle.
posted by shinynewnick at 9:18 AM on September 24, 2007
Sure enough, I suddenly received collection notices from California businesses, and someone had managed to get checks for this dormant but still open account. The only thing I can figure out is that someone got my old PO Box and received some notice about ordering checks and started a new set. Anyway, there was absolutely no protection at the merchant level - they accepted checks signed Nicole when my name is Nick. The bank was also no help, they just kept charging overdraft fees on the bouncing (and obviously forged) checks.
It was a struggle for over a year to get everything lined out, and despite all the effort it still dinged my credit score, as the collectors are not helpful in that situation either. Close it up, save yourself the potential hassle.
posted by shinynewnick at 9:18 AM on September 24, 2007
The only way a bank account can affect your score is if you overdraft the account and forget about it, or if you have overdraft protection, which is a credit line.
posted by Mr. Gunn at 9:34 AM on September 25, 2007
posted by Mr. Gunn at 9:34 AM on September 25, 2007
This thread is closed to new comments.
posted by lou at 8:41 AM on September 24, 2007