Your credit score can be affected by even a smallest financial change done. Closing a bank account can be one of the changes which can leave you with a doubt on whether this would affect your credit score or not.
Closing / Cancellation of credit cards:
• Closing a credit card can put the existing one high into usage. This high usage can impose a negative impact on your credit score.
• This does not mean that you can own many credit cards and increase your credibility.
• You need to maintain credit cards and use each of them strategically which would help you gain more credibility.
• The closing of an old credit card can also impact your credit score.
• Staying loyal to the credit banks can increase your credit score and thus help you gain benefits in this context.
Closing or cancellation of bank accounts:
• Owning bank accounts that you do not use anymore does not make any sense. Hence, in case you are willing to close your bank account which has remained dormant for a long time, it would not affect your credit score.
• In Canada, bank accounts have no bearing to your credit score, however, it is necessary that your account does not fall in the red zone, i.e. your account should not owe money to the bank.
• If you are unable to pay your debts owned by the financial institutions, this can majorly impact your credit score.
• If this debt is further moved to the collections department, then it would even give you a worse hit on your credit score.
• In order to close a bank account without it causing harm to your credit score, it’s necessary for you to make sure that your account does not lose its reliability.
Hence, get rid of all those un-operated bank accounts today without worrying about your credit score.
Will your credit be affected if your account is closed?
