Sometimes there’s nothing better than getting rid of things you don’t use anymore — clothes, shoes, that exercise bike you rode once and never looked at again (we can’t be the only ones?)… It can seem like a breath of fresh air to get rid of old, unused  bank accounts to clean up your credit history, but unlike cleaning out your wardrobe or the garden shed,  it's important to be aware of the impact it  can have  on your credit score. We’ve got you covered with everything you need to know before you start any financial spring cleaning.

Does closing old bank accounts really affect credit scores?

Yes, closing old accounts can have an impact on your credit score but it depends on your individual financial situation. It's worth noting that the impact of closing old accounts may not be immediate or dramatic. Credit scores are calculated based on many factors. 

Additionally, if you have a strong credit history in other areas, the effect of closing an old account may be minimal. Remember, managing your credit responsibly and maintaining a positive credit history are essential for achieving your long-term financial goals.

If you want help navigating financial systems and products,  check out this page for more tips and advice.

How does closing old bank accounts affect credit scores?

It can, but not if you’re making sure you’ve got all the facts. Let’s start with the situations where it will have an impact.

The first scenario is when you have dipped into your overdraft. Closing an old bank account could affect your credit score if it is overdrawn because the bank has covered you, and like any credit, that debt will need to be repaid. If you close your account while it’s in a negative balance, it could lead to debt collectors getting involved. This is the last thing you want as they can report you to the credit reference agencies (CRAs) which can really harm your score. If you do want to close a bank account, make sure the balance is cleared and you have cancelled all automatic payments.

Think you might need a bit more info on overdrafts? Check out this blog post.

The second scenario considers the average age of your accounts which is included in your reports. Closing a long-held bank account can impact your score as it can shorten your credit history. While it might not have the biggest effect, you want to give yourself every chance of having an excellent score, right?

How long do old accounts stay on credit reports?

If it’s an active account, then potentially for the rest of your life. The aim of the credit-building game is to show long relationships with the accounts you hold which show you are financially responsible — paying back on time, every time.

How to remove old accounts from your credit report

Typically, if you haven’t used an account for some time, the bank may choose to mark it as dormant or inactive for you.

But if you’ve recently checked your credit reports and found old accounts which you’ve already closed, you can have these removed by contacting the bank (as long as they don’t have any outstanding payments due). The bank will then update this with the credit reference agencies and you should then see this take effect within a couple of months.

How to boost your credit score when it’s been impacted by closed accounts

Okay, so maybe it’s too late and your score has already been impacted by closing an old bank account. Now what?

Don’t panic. There’s a proven way to build your credit score. Get started with a Full Loqbox membership for our quickest results.

^{Improvements to your credit score are not guaranteed}

If you don’t know your credit scores (yes ‘scores’ plural, each CRA calculates your score differently and uses different systems to score you with!), you can check them for free and without impacting them with these recommended services:

ClearScore (uses Equifax data)*

Experian App (uses Experian data)

Intuit Credit Karma (uses TransUnion data)

*For transparency, we wanted to let you know that ClearScore pay us (a small commission) if you sign up for them using this link. 

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