Banking Blues

I’m worried about my FICO score. I opened and then closed two checking accounts this year because I was dissatisfied with the banks’ high maintenance fees. Will this activity lower my score?
—A.M., Plainfield, NJ

Your score will not be affected if you switch banks. Checking and savings accounts do not appear on your credit report. Your FICO score is composed of payment history, amounts owed, length of credit history, new credit, and types of credit used.

Your ability to open another bank account, however, might be affected, since your banking history is tracked. The most commonly used consumer banking report is ChexSystems, which records matters such as bounced checks. You can receive one free copy annually by contacting ChexSystems directly. Negative information remains on ChexSystems reports for five years. Banks usually check this report before deciding to accept your business, and if you frequently change banks, it could influence their decision. Also, lenders often reference banking relationships when they decide whether or not to extend credit.

In the future, request a copy of each bank’s fee schedule and comparison shop before choosing a bank. Go the extra mile and speak to a customer service representative. You should also look into opening an account with a bank that offers free checking. Under the federal Truth in Savings Act, a free account has no minimum balance requirements and no regular service fees.

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