Would closing a long-held account affect credit rating?

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Sheridan
Posts: 34
Joined: Tue Feb 01, 2022 9:02 pm
Location: USA

Would closing a long-held account affect credit rating?

Post by Sheridan »

Hello Bogleheads,

I keep a Savings and Checking account open with a credit union only because I've had it for a long time, because my understanding is that this looks good on credit reports, but I'd like to close it. I don't use it and just have to remember to make an occasional transaction so the state doesn't take it.

Credit Union 1 - account open for 25 years, the one I want to close
Credit Union 2 - open for ~14 years
Credit Union 3 - open for 9 years

I only keep about $50 in Credit Union 1. I moved my money out because they kept making unforgivable mistakes (such as depositing my money into other members' accounts and others' money into mine; depositing checks in wrong amounts).

Since I've had other accounts open fairly long, I wonder if it would have any effect if I closed it? I'd like to simplify where my money is. My overall credit is excellent.

Thank you in advance for your thoughts.

[edited to add a detail]
Last edited by Sheridan on Fri Aug 05, 2022 12:09 pm, edited 1 time in total.
JBTX
Posts: 9562
Joined: Wed Jul 26, 2017 12:46 pm

Re: Would closing a long-held account affect credit rating?

Post by JBTX »

Are you talking credit cards or bank accounts?

Length of credit lines is a factor - it is kind of secondary but it does make a minor difference.

Bank accounts have historically not affected credit scores.
howard71
Posts: 231
Joined: Wed Oct 28, 2020 11:10 am

Re: Would closing a long-held account affect credit rating?

Post by howard71 »

If you take a look at your credit reports from the bureaus you won't see anything related to checking/savings accounts or any other type of asset you hold. So there is no way this could affect your credit rating because they don't have the information (I wrote credit scoring software so I'm quite familiar with what's in the raw data - assuming nothing has changed since I retired).

There are other agencies that do keep data on checking accounts, mostly used when you try to open a new account. Just not the credit bureaus. They are only interested in money you owe and how you pay it back.
Topic Author
Sheridan
Posts: 34
Joined: Tue Feb 01, 2022 9:02 pm
Location: USA

Re: Would closing a long-held account affect credit rating?

Post by Sheridan »

JBTX wrote: Fri Aug 05, 2022 11:28 am Are you talking credit cards or bank accounts?
Bank accounts. I edited my original post to add that.
howard71 wrote: Fri Aug 05, 2022 11:34 am If you take a look at your credit reports from the bureaus you won't see anything related to checking/savings accounts or any other type of asset you hold. So there is no way this could affect your credit rating because they don't have the information (I wrote credit scoring software so I'm quite familiar with what's in the raw data - assuming nothing has changed since I retired).

There are other agencies that do keep data on checking accounts, mostly used when you try to open a new account. Just not the credit bureaus. They are only interested in money you owe and how you pay it back.
Great info, thanks. I assumed it was bank accounts because it shows stability, but never looked into it. Age of credit lines makes more sense.
muffins14
Posts: 2436
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: Would closing a long-held account affect credit rating?

Post by muffins14 »

Yep just close it. Checking/Savings do not impact your credit ranking
35% VTI, 25% AVUV, 15% IXUS, 15% AVDV, 10% VWO
tj
Posts: 6298
Joined: Thu Dec 24, 2009 12:10 am

Re: Would closing a long-held account affect credit rating?

Post by tj »

ChexSystems is what tracks those types of accounts, and its unlikely to matter.
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