Do Banks Check Your Credit When Opening An Account

In a traditional sense your credit score isn t a determining factor when it comes to opening a business bank account.

Do banks check your credit when opening an account.

Your bank might offer an alternative to services that require a check. I know with my family member five years is not enough for the banks to change their minds. I depends on how long ago the several years really is. The credit report that financial institutions access in this situation however is a little different.

Banks don t look at your credit score when you open a checking and or savings account but they may screen your banking history. Even though you re not actually applying to borrow money when you open a checking account don t be surprised if your bank wants to do a credit check before completing the account opening process. Hard inquiries which result from the customer asking for a check damage a credit score by a few points so it pays to avoid them. Ask the bank officer if the account requires a credit check.

Chexsystems is a nationwide consumer reporting database that tracks banking activity of customers. Do banks pull a credit report when you open a personal checking account. The majority of banks in the united states use the database to discover any previous issues an account holder had with a bank in the past. Rather than run a credit check many banks check your record with a consumer reporting service.

Banks with no credit check to open an account or those offering second chance banking accounts are usually not free as it is evident from the listed options above. However some banks including those mentioned above do consult a reporting agency namely chexsystems which gathers information about banking customers typically risky ones. Banks pull credit reports to see if there s any negative information about how you manage credit information that indicates you could cost them money if they take you on as a customer. Banks not only check your previous credit but will close your account if you have too many overdrafts.

Some but not all banks and credit unions perform a credit inquiry when you. If you were opening a credit card or seeking a loan or line of credit then that would be a different story. Banks are perfectly within their legal rights to pull a credit report when you apply for a checking account says chi chi wu staff attorney at the national consumer law center. However most of the banking institutions and credit unions will give you a 12 month probation period to prove your account management skills.

Not all banks run a report so you can shop around until you find one that does not.