How Checks Affect Your Credit Score

MoneyTips

Can your checking account affect your credit score? It's possible, but only in certain circumstances that you should avoid.

Your credit score is calculated using information from your credit report, which is a history of all of your credit-based transactions. Checking accounts are funded by your deposits – there's no borrowing of money involved. Normal daily activities like writing checks and transferring funds aren't reported to credit reporting agencies and don't show up on your credit report.

When you open a new checking account, banks can ask for a hard credit pull as part of your evaluation. Hard credit pulls will cause a small temporary drop in your credit score. However, most banks use soft credit pulls that do not affect your credit score at all.

So how can checking account activity affect your credit score? Generally, there's only one way to damage your credit report with a checking account. You have to allow your checking account to be used fo...

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