Depending on company policy, a bank may or may not pull a credit report when you apply for a personal checking account. However, it's very probable that the bank will request a copy of your consumer banking report and consider your past banking issues. If you're concerned about the bank requesting either of these documents, ask which consumer reports it uses before you submit your application.
Consumer Banking Record
Rather than run a credit check, many banks check your record with a consumer reporting service when you apply for a new checking account. If you were constantly overdrawn on your last account, your last bank might have reported your bad behavior to a consumer reporting service such as ChexSystems.
ChexSystems receives reports from banks about risky activity like unpaid bank fees and bounced checks and compiles them into reports and scores similar to credit reports and scores. Banks use these reports to determine which customers seem too risky to take on. If your new bank finds that you have a record with ChexSystems, it may decline your application for a personal checking account.
Hard Credit Inquiries
Some, but not all, banks and credit unions perform a credit inquiry when you apply for a new bank account. This type of credit inquiry is referred to as "hard inquiry" or a "hard pull," because you're voluntarily allowing the credit check in the application process. The credit bureaus are suspicious of consumers who are constantly looking for new sources of credit, so a "hard inquiry" slightly decreases your credit score. However, as long as you're not applying for credit cards and bank accounts at a constant rate, it should have little effect on your overall score.
By and large, your checking account activity doesn't affect your credit score. Banks don't report regular activities such as deposits, withdrawals, cashing and receiving checks to the credit bureaus. However, if you owe a sum of money to your bank and never pay up, it could affect your credit. If your bank doesn't think it will be able to collect from you, it may send your account to collections, which hurts both your credit score and your ChexSystems record.
Do Your Homework
Do some research before you apply for a checking account. Request a free copy of your credit report every year to ensure there's no negative information that could affect your checking application. You can contact ChexSystems and request a copy of any reports listed on your consumer file, just as you can contact the ordinary credit reporting bureaus. If you think either your credit report or your consumer banking report could negatively affect your checking application, consider applying for a second-chance bank account. These accounts are specifically designed for individuals who've had banking and credit problems in the past.
- Bankrate: Banking and Your Credit Score
- My Bank Tracker: How Your Checking Account Can Impact Your Credit Score
- Bankrate: Bank Denied You For a Checking Account?
- NerdWallet: Blacklisted by ChexSystems? What to Know
- Consumer Financial Protection Bureau. "What Is a Credit Score?" Accessed April 16, 2020.
- Consumer Financial Protection Bureau. "My Bank or Credit Union Closed My Checking Account. Will This Hurt My Credit?" Accessed April 16, 2020.
- Consumer Financial Protection Bureau. "What Are Specialty Consumer Reporting Agencies and What Kind of Information Do They Collect?" Accessed April 16, 2020.
- Consumer Financial Protection Bureau. "How Do I Get a Copy of My Credit Reports?" Accessed April 16, 2020.
- Consumer Financial Protection Bureau. "How Long Does Negative Information Stay on My Credit Report?" Accessed April 16, 2020.
- ChexSystems. "Frequently Asked Questions (FAQs)." Accessed April 16, 2020.
- Consumer Financial Protection Bureau. "Can I Close My Account Whenever I Want?" Accessed April 16, 2020.
Based in San Diego, Calif., Madison Garcia is a writer specializing in business topics. Garcia received her Master of Science in accountancy from San Diego State University.