What Happens to My Credit Score When I Apply for a Bank Account?

Need a new bank account? Here's what to expect as far as your credit score goes.

It's important to do your best to keep your credit score in good shape. The higher that number, the more likely you'll be to get approved the next time you want to take out a loan or open a new credit card. And if you have a strong credit score, you might qualify for a lower interest rate on a personal loan or mortgage.

Often, applying for a new loan or credit card will actually cause your score to take a small hit. When you ask to borrow money in any capacity, the lender or credit card company at hand will need to verify you're not too much of a risk. To do so, it will perform a hard inquiry on your credit report, which can cause your score to drop anywhere from five to 10 points on average.

But what if you're applying for a new bank account? Will that have a similar impact?

For the most part, a bank account application will not result in a hard inquiry on your credit report. You shouldn't worry about damaging your credit even modestly as you look for a place for your money.

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Hard inquiries vs. soft inquiries

When you open a bank account, you're not asking to borrow money. Rather, you're simply asking for a place to keep the money you already have or expect to gain in the future. As such, banks typically do not perform a hard inquiry on your credit report when you apply for an account (though in some rare cases, they might).

Rather, banks perform what's known as a soft inquiry. The benefit of a soft inquiry is that it shouldn't cause any credit score damage. That's important, because if your credit score isn't in the best of shape, sometimes, even a modest drop could cause issues.

Imagine you want to apply for a conventional mortgage. You'll need a minimum credit score of 620 to go that route (though some lenders may require a higher credit score). If your score is 624, you may not be able to afford a five-point hit before submitting that mortgage application. But thankfully, opening a new bank account shouldn't change your credit score at all.

Can your bank account activity affect your credit?

Generally, applying for and opening a new bank account won't have an impact on your credit score. But if you don't manage your account well, it could affect your credit.

If you overdraw your account but don't pay the overdraft fees you're liable for, that could hurt your credit. So could closing out a bank account with a negative balance. However, having a small amount of money in your bank account won't cause your credit score to drop.

A higher credit score could open the door to affordable borrowing options, so it's important to do your best to keep your score in good shape. That includes knowing what factors will impact that number. Generally speaking, you can open a new bank account without having to worry about any sort of credit score–related backlash.