Opening a high-yield savings account usually does not affect your credit score. A high-yield savings account is a deposit account, not a loan or credit account. Its balance, interest and normal transactions are generally not reported to the 3 major credit bureaus: Experian, Equifax and TransUnion.
The main exception is an application that creates a hard credit inquiry. Before applying, find out whether the bank will use a hard inquiry, a soft inquiry or a separate bank-account screening report.
At a Glance
| Situation | Likely effect on credit score |
|---|---|
| Opening a standard high-yield savings account | No direct effect |
| Bank checks ChexSystems or Early Warning Services | No direct effect on your traditional credit score |
| Bank performs a soft credit inquiry | No effect |
| Bank performs a hard credit inquiry | May cause a small, temporary decrease |
| Unpaid fees or a negative balance sent to collections | May damage your credit |
| Using savings to pay credit bills on time | May help indirectly |
Why a High-Yield Savings Account Normally Does Not Affect Your Credit
Traditional credit scores rely mainly on information related to borrowing, including:
- Credit card balances and limits
- Loan balances
- Payment history
- Credit utilization
- Length of credit history
- Recent credit applications
A high-yield savings account holds your money and pays interest. It does not give you borrowed money, so the account usually does not appear on your traditional credit reports.
The higher interest rate does not change how the account is treated. A high-yield savings account generally has the same credit-reporting effect as an ordinary savings account: none.
Can the Bank Check Your Credit When You Open the Account?
Yes. A bank may check information about you, but the type of check matters.
Banks commonly use bank-account screening companies such as ChexSystems and Early Warning Services. These companies may provide information about an applicant's checking-account history, unpaid overdrafts or suspected fraud. Their reports are separate from the credit reports maintained by Experian, Equifax and TransUnion.
A bank or credit union may also review a traditional credit report during the application process. The Consumer Financial Protection Bureau says financial institutions may look at credit reports as well as checking-account reports.
The review may be:
- A soft inquiry: This does not affect your credit score.
- A hard inquiry: This may affect your score because credit-scoring models consider hard inquiries.
The application terms or consent screen should say whether the institution will perform a hard or soft inquiry. If the wording is unclear, contact the bank before submitting the application.
What Is the Difference Between ChexSystems and a Credit Report?
ChexSystems and Early Warning Services focus on banking history. Experian, Equifax and TransUnion mainly report credit history.
| Report type | What it usually tracks | Does checking it affect your credit score? |
|---|---|---|
| Traditional credit report | Credit cards, loans, payment history and credit inquiries | A hard inquiry may affect your score |
| ChexSystems report | Certain checking-account applications, closures and unpaid negative balances | No direct effect on traditional credit scores |
| Early Warning Services report | Banking-related account and transaction information used by participating institutions | No direct effect on traditional credit scores |
A bank-account screening report can still affect whether a bank approves your application. For example, an unpaid negative balance from a previously closed account could appear in a checking-account report even if it does not appear on your traditional credit report.
When Can a Savings Account Hurt Your Credit?
A savings account can hurt your credit if an unpaid debt reaches collections, the application creates a hard inquiry or moving money causes you to miss a credit payment.
Unpaid Fees or a Negative Balance
If you leave fees, an overdraft or another negative balance unpaid, the bank may send the debt to a collection agency. A collection account can then appear on your credit reports and lower your credit score.
A Hard Inquiry
A hard inquiry may cause a temporary score decrease. FICO says one hard inquiry typically has a small effect, often fewer than 5 points, although the impact varies by credit profile.
Hard inquiries can remain on a credit report for up to 2 years. FICO Scores generally consider them for up to 12 months.
Missed Payments After Switching Banks
Opening a new savings account does not create a late payment. But if you move money between banks and forget to update an automatic payment for a credit card or loan, the payment could be missed. A seriously overdue payment may damage your credit.
Can a High-Yield Savings Account Improve Your Credit Score?
No, not by itself. Banks generally do not report savings-account balances, interest payments or deposits to the major credit bureaus. Saving money in the account will not build a traditional credit history.
The account can still support your credit indirectly. You can use the money to:
- Pay credit card bills on time
- Avoid missed loan payments
- Build an emergency fund
- Avoid relying on high-interest credit for unexpected expenses
Some newer financial products analyze linked bank-account data or report certain account activity to a credit bureau. Those products are different from a conventional high-yield savings account. Do not assume that a savings account will build credit unless the provider says it reports activity to a credit bureau.
How to Open One Without Risking a Credit-Score Drop
Before submitting your application:
- Read the application disclosure. Look for language about a credit report, credit inquiry or credit check.
- Ask whether the check is hard or soft. A soft inquiry does not affect your score. A hard inquiry may.
- Confirm which account-screening process the bank uses. ChexSystems and Early Warning Services are separate from the 3 major credit bureaus.
- Check the fees and overdraft policies. Unpaid fees can eventually be sent to collections.
- Keep enough money available for automatic payments. This can help prevent missed credit card or loan payments after you move money to the new account.
- Verify insurance. Confirm that the bank is FDIC-insured or that an eligible credit union is federally insured by the NCUA.
Bottom Line
Opening a high-yield savings account normally does not lower your credit score. Before applying, check whether the bank uses a hard inquiry. After opening the account, pay any fees or negative balances and keep automatic credit payments funded.