I’m about to apply for an American Express card, but I also would like to switch banks sometime in the next two weeks. Would closing a bank account and opening a new one at a different bank affect my chances of being approved by AMEX?
No, your bank accounts have no effect on your credit report. They report credit accounts only.
Not necessarily true. When opening a new account, the bank may pull your credit report. Usually, when someone pulls your credit report, this gets listed on your credit report - this is called a hard inquiry. This information will stay on your report for 24/25 months.
The more hard inquiries you have on your report, the lower your score. It really starts to have an impact when you get up around 5 or more. Note that many times, several hard inquiries in a short time will be ‘lumped together’ and reported as only 1 hard inquiry. In addition, sometimes the inquirer doesn’t have it listed on your report (this was the case for me recently in regards to a quote for condo hazard insurance). And sometimes, it will show up a Transunion, but not Equifax, or whatever other inexplicable combination.
This shouldn’t affect your score by more than 5 points or so, but the system is fairly opaque, so it’s hard to be sure. You can, of course, ask the bank in question whetehr they will make a hard inquiry. It is generally accepted that hard inquiries make up about 10% of your overall credit score.
http://www.cbsnews.com/stories/2003/04/29/earlyshow/contributors/raymartin/main551521.shtml
Not typically. Ask the bank if they intend to to do a credit search, before you open the account.
Besides, with AMEX, the basic green card is either pass/fail. There is no credit limit, as you are expected to pay off your balance every month. I doubt a credit check on your credit composite will affect your application.
In the highly unlikely event that a bank pulls your credit report before offering you an account, it will be a soft pull. Hard pulls are only permitted in response to an application for credit.
A hard pull may be performed if you sign up for line-of-credit type overdraft protection.
In any case, the actual amount that hard pulls affect one’s score is vastly overestimated. It takes a suspicious amount of hard pulls within a short time frame to set off a risk flag.
Your credit score changes with the number of pulls you have. It may stay the same if you go from 3 to 4, but it will definitely change when you get to 5. A change in score is a change in score, it doesn’t have to come with flag.
Cite?
IANA banker, but in my experiences with them banks do not routinely perform full credit checks when opening new accounts, however most major banks will run you through ChexSystems, which is not a full credit check but rather a report of your negative activities regarding bank accounts(outstanding negative balances, excessive overdrafts, etc.). AFAIK a ChexSystem inquiry is not necessarily reported on your full credit report.
To all, my original post stated that:
“the bank may pull your credit report”
I did not include an indication of the likelihood of this occurence, because it is irrelevant - the OP can just ask the bank if it will. Then decide.
List of Banks that make hard pulls
Thanks for the responses so far.
Speaking of which, any idea what my credit rating needs to be to qualify for the green card?