Will a Savings Account Boost My Credit Score?

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Your bank teller should give you information on your rights with ChexSystems.
Your bank teller should give you information on your rights with ChexSystems. (Image: Comstock Images/Comstock/Getty Images)

People who have problems with their credit sometimes also have issues with their savings accounts. In most cases, credit accounts and savings accounts are completely unrelated, meaning that a savings account unfortunately doesn't do much to raise a dinged credit score. There are, however, connections between savings and credit that may let a savings account work in your favor.

Savings Account Funding

Credit accounts function with money from a creditor. For instance, if you have a credit card, the credit card company fronts you anything spent on your credit limit whenever you make a purchase. You pay the credit card company back with your money later. With a savings account, you aren't borrowing from anyone. All the money in the account starts as yours. For this reason, having a savings account won't help your credit, as savings accounts aren't credit accounts.

ChexSystems

Banks typically don't report to credit bureaus unless you have a credit card through them. Instead, they report to ChexSystems. This agency looks at how you handle your checking and savings accounts. If you manage your savings account poorly, such as overdrawing your balance, the negative activity shows up on your ChexSystems report.

Savings Accounts and Credit Scores

Lenders sometimes look at your ChexSystems report just as they do your credit report. If you have too many negative items on your ChexSystems report, creditors and lenders may raise what you're paying in interest, opt to close your accounts or deny your new credit applications. All of this makes it harder to keep up financially, making the likelihood of becoming delinquent on accounts and lowering your credit score higher.

The Bottom Line

Savings accounts do not directly help your credit. However, a good ChexSystems report can complement evidence on your credit report that you're getting your finances back in control. With good savings account management, your positive ChexSystems report may make creditors and lenders willing to keep working with you. If you can keep those relationships going, you'll lengthen your credit history and therefore possibly help your credit score.

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