Does Moving Your Bank Account Affect Your Credit Score?
Published 7th of October 2012·Updated 2 April 2026
Reviewed by: Reviewed for accuracy April 2026
Switching bank accounts does not directly affect your credit score. A standard current account is not a credit product, so moving from one bank to another leaves no negative mark on your credit file. The main exception is if your old account had an arranged overdraft that helped your credit history, and your new bank does not offer you the same facility.
Short Summary
A normal current account switch has no direct impact on your credit score. Credit reference agencies do not record the simple act of changing banks.
However, switching banks can have indirect effects. If you had an overdraft with your old bank, you lose that credit facility when you switch, which can slightly reduce your available credit. Applying for an overdraft at your new bank triggers a hard search.
Banks also consider your history with them when assessing applications for credit products like loans or credit cards. Customers with a long-standing relationship often find it easier to get credit from their own bank than from a new one.
Does the bank switch itself harm your credit score?
No. The Current Account Switch Service (CASS), used by most UK high-street banks including Barclays, HSBC, Lloyds, and NatWest, transfers your direct debits and standing orders within seven working days. It does not trigger a hard search on your credit file, and no negative entry is made.
Your new bank will verify your identity, which may involve a soft search that you can see on your file but that other lenders cannot. This has no effect on your score.
What happens to your overdraft when you switch?
If you had an arranged overdraft with your old bank, it does not transfer automatically. You will need to apply for an overdraft at your new bank separately, and that application will trigger a hard search. If you are refused or given a smaller facility, you lose a credit line that may have been contributing positively to your credit history.
If you were using your overdraft regularly, you will also need to settle any outstanding balance before the switch completes (or arrange to have it cleared as part of the switch). Leaving a balance unpaid on the closed account will damage your credit file.
Does your credit application history stay with your old bank?
Your credit file is held by the credit reference agencies (Experian, Equifax, and TransUnion), not by individual banks. Your payment history, defaults, and credit agreements go with you wherever you bank. Your new bank can see all of this information; switching banks does not give you a fresh start on your credit history.
Does switching banks affect future credit applications?
In most cases, no. Where it can make a difference is in relationship-based lending decisions. Some lenders, when assessing borderline applications, take into account how long you have been a customer. If you have banked with NatWest for ten years and apply for a NatWest personal loan, that history carries some informal weight.
If you have recently switched, that relationship history resets with your new bank. This rarely makes the difference on its own, but it is a factor worth knowing about.
| Scenario | Effect on credit score |
|---|---|
| Switching current account (no overdraft) | None |
| Switching and applying for overdraft at new bank | Small temporary reduction (hard search) |
| Old bank overdraft not settled before switch | Negative (outstanding balance becomes a debt) |
| New bank declines overdraft application | Slight reduction; you lose a credit facility |
| Switching after multiple credit applications | Neutral; existing hard searches remain on file |
Is it worth switching banks if your credit is poor?
Switching to a bank that offers a better-suited current account can be worthwhile regardless of your credit situation. Some challenger banks, including Monzo and Starling, offer accounts specifically designed for people rebuilding their finances, with features such as spending alerts and savings pots that help with budgeting.
However, switching banks will not erase or improve a poor credit history. Your file follows you. If you are looking to improve your credit score, focus on consistent on-time payments, reducing credit utilisation, and registering on the electoral roll.
FAQ
Does applying for a new bank account affect my credit score?
It depends. Most basic bank accounts use only a soft search to verify identity, which does not affect your score. Premium accounts with overdraft facilities typically use a hard search, which can cause a small, temporary reduction. Check with the bank beforehand.
Will my direct debits transfer automatically when I switch?
Yes, if you use the Current Account Switch Service. All direct debits, standing orders, and incoming payments are transferred automatically within seven working days, and any misdirected payments are redirected for three years.
Can switching banks improve my credit score?
Not directly. However, if your new bank gives you an overdraft facility that you did not have before, and you use it responsibly, it will contribute positively to your credit history over time.
Do banks share information with each other?
Banks do not directly share account information with each other, but they all access the same credit reference agencies. Experian, Equifax, and TransUnion hold your full credit history and any lender can access it (with your permission) when assessing a credit application.
Should I switch banks to escape a bad credit history?
No. Your credit file is held by the credit reference agencies, not your bank. A new bank account does not reset or improve your credit history. The only way to improve your credit history is to build a positive track record of on-time payments and responsible credit use over time.