Thinking of ditching your bank? While closing a bank account usually won’t affect your credit score directly, there are a few things to consider to avoid future headaches.
Why Closing Can Be Risky:
- Negative Balances: If you owe money when you close the account, it could be sent to collections, damaging your credit score.
- ChexSystems Report: Negative info on your ChexSystems report (used by banks) can make it hard to open new accounts.
How to Close Safely:
- Open a New Account First: Avoid disruptions by having a new account ready before closing the old one.
- Update Automatic Payments: Ensure all bills and automatic debits are transferred to your new account to avoid missed payments.
- Monitor Credit Reports: Regularly check your credit reports (free weekly at AnnualCreditReport.com) for any errors.
Remember: Closing an account typically won’t hurt your credit score, but closing it the wrong way could lead to problems. By following these tips, you can close your account smoothly and keep your credit score healthy.