Is Your Savings Account Information Included in a Credit Check?

Credit Reports

Credit reports provide prospective lenders with a snapshot of your payment history, and lenders use this information to evaluate your character. If you pay your bills on time, lenders regard you as a reliable borrower. If you frequently fail to make loan payments on time, lenders view you as a high-risk borrower. A savings account contains your own money and the frequency of your deposits or withdrawals has no impact on anybody else because you are not borrowing funds or paying interest on a debt. Therefore, savings accounts have no impact on your credit report or credit score.

When you apply for a loan or credit card, you often have to pay closing costs. For a home loan these closing costs often amount to thousands of dollars. Even if you have a good credit score, a lender will not approve a home loan application unless you can prove that you have sufficient funds to cover the closing costs. Consequently, lenders typically require you to submit 60 days of bank statements whenever you apply for a home loan. Having a savings account with a high balance therefore increases the probability that a lender will approve your loan application.

You cannot write checks directly from a basic savings account; neither can you use your debit card to make purchases by directly drawing on funds held in savings. Consequently, many people believe that you cannot overdraw a savings account. However, monthly maintenance fees and service charges can deplete your savings account and cause it to go into the negative. If you do not settle a negative balance, it becomes a debt and your bank can report this unpaid debt to the credit bureaus. Therefore, some savings accounts can appear on your credit report.

People with little or no credit history often use cash-secured loans as a way of building credit. When you obtain one of these loans, you deposit money into a savings accounts or certificate of deposit, and your bank places a freeze on that account so you cannot make withdrawals. The bank then lends you a sum of money and uses your savings account as collateral for the loan. The loan shows on your credit report but the savings account that secures it does not.