Do Checking and Savings Accounts Help Establish Credit?
In this day and age, just about every facet of life is connected to your creditworthiness. It’s not just about buying a home or car anymore. Employers check credit reports to see if you are trustworthy. Insurance companies tie premiums to your credit rating. Even landlords check credit ratings to see if you pay your bills on time. Establishing credit helps you get the best deals of life’s big purchases.
Having active credit cards is also required for renting cars, opening video store accounts and other important matters.
The best way to establish credit is to open a credit card and use it responsibly each month. Secured credit cards, student cards, gas cards and retail cards are all good options for new borrowers.
It makes no difference to your FICO Score or the credit bureaus whether you have seven checking and savings accounts or none at all. The only time that your checking account will affect your credit score is if you bounce checks and do not pay the money back. If the balance you owe your bank gets turned over to a collection agency, then that information will show up on your credit report.
The checking and savings accounts themselves do not show up on your credit report. When you bounce a check it only shows up on your credit report if it goes to collections. When that happens, your credit score will drop.
Tags: Bounce Checks, Checking Accounts, Collection Agency, Credit Bureaus, Creditworthiness, Employers Check Credit Reports, Establish Credit, FICO Score, Gas Cards, Landlords Check Credit Ratings, Retail Cards, Savings Accounts, Secured Credit Cards, Student Cards, Video Store Accounts