Does opening a savings account affect my credit score?

Opening a savings account can be a positive move for your long-term financial health. But you may be wondering if it could have a negative effect on your credit score – and you’re not alone.

Here’s the good news: the relationship between savings and credit reports isn’t as complex as you might think. Let’s look at the reasons why. 

What do we mean by a savings account? 

You may be wondering what sets a savings account apart from an everyday bank account. Put simply, it’s a place to keep the money you plan to use in the future, rather than spend right away. While your current account handles your day-to-day spending, a savings account helps your money grow quietly in the background.

When we talk about savings accounts, we’re actually referring to several different types – each designed to suit different saving styles. Let’s break them down:

• Easy access accounts. You can add money in and withdraw without needing to let the bank know in advance. They’re perfect for keeping your savings within arm’s reach.

• Notice accounts. You need to let the bank know in advance before you can access your money – usually 30, 60, or 90 days’ notice.

• Individual savings accounts (ISAs). These let you save up to £20,000 a year without paying any tax on the interest you earn.

• Fixed-rate bonds. Think of these as a reward for patience. You agree to lock your money away for a set time, and the bank will typically reward you with a higher interest rate.

Opening any of the types of savings accounts above shouldn’t affect your credit score. 

Why opening a savings account won’t affect your credit score

Whether it’s an easy-access saver or a cash ISA, there are two main reasons why opening a savings account will leave your credit score alone:

• Applications for savings accounts don’t typically require a credit check. They usually do for current accounts.

• When savings account applications do use a credit check, it’s usually a ‘soft’ search. Unlike ‘hard’ searches, these don’t impact your score.

Which other bank accounts can affect your credit score?

Unlike savings accounts, other types of bank accounts often require a hard search when you apply. Don't worry too much though – one search shouldn’t cause any issues, but lots of them appearing in a short time might raise some eyebrows, as it could be perceived that you’re too reliant on credit or having applications rejected elsewhere. 

Let's look at which accounts typically need these hard checks:

• Current accounts often involve a check of your credit report, but it’s worth asking your bank if they’ll do a hard or soft search.

  Basic current accounts are the main exception to this, as they’re often accounts offered specifically to people with low credit scores or without a credit history.

• Overdraft accounts let you spend money even when your balance hits zero. They’re essentially a type of credit, so will almost always require a hard search for lenders to assess how likely you are to pay back what you borrow.

• Credit cards will always involve a deeper look at your credit history. But most providers offer eligibility checkers that only do a soft search. It’s like testing the waters before jumping in – if you’re not likely to be accepted, you can avoid the hard check altogether.

Keep in mind: a single hard check is unlikely to have a substantial impact on your credit score. So, applying for and opening a single account will have a minimal effect. It’s a different story when there are multiple hard checks in a short period, this could have a significant impact on your credit score.

Recap: Does opening a savings account affect my credit score?

Opening a savings account won’t have a direct impact on your credit score. Savings accounts typically only require a soft credit check to open, which won’t have any effect at all. 

Being aware of your credit score is an important part of keeping your credit health in shape. And one of the best ways to do this is to regularly check your credit report. 

At Checkmyfile, we provide the most detailed credit report available in the UK. We collect data from the UK’s three major credit reference agencies (Experian, Equifax, and TransUnion), so you have a complete picture of where you stand.

Start your 30-day free trial with Checkmyfile today. It’s then a monthly subscription – cancel online anytime.