Will opening a savings account affect my credit score?

Monitoring and improving your credit score is important. So it’s a valid concern to question whether opening a savings account affects your credit score. The short answer is no; it doesn’t.

Opening a savings account will not harm nor help your credit score. Similarly, your credit history shouldn’t affect your ability to open an account. However, there are some connections.

We explain why having a savings account won’t affect your credit score but how having savings can have an indirect impact.

When you apply to open a savings account, most financial institutions will run a soft check on you. This is why some people think their credit score is affected or considered. But the purpose of this credit check is purely to verify your identity.

What is a soft credit check?

A soft credit check is a type of credit inquiry that doesn’t leave a visible footprint on your credit report. At Shawbrook, we use soft credit checks for customers when they apply for a savings account to make sure they’re who they say they are.

This differs from a hard credit check, which leaves a mark on your credit report and can affect your score.

For more information on soft and hard credit checks, visit our ultimate guide to credit checks and searches.

Depositing or withdrawing money from a savings account does not affect your credit score.

Your savings account balance does not appear on a credit report. Anyone checking your report cannot tell how much money you’ve deposited, withdrawn, or currently have in your account. Therefore, putting money in or taking funds out of a savings account does not influence your credit score.

However, while your savings don’t directly affect your credit score, having a healthy amount of funds — whether kept in a current bank account or dedicated savings pot — can provide better protection against unexpected costs. This can indirectly protect your credit score.

While there’s no direct correlation between your credit score and a savings account, maintaining a healthy balance can protect against the need to seek credit — which can affect your score. Having enough funds to make payments on time is also an important factor.

Using your savings as an emergency fund limits your need for credit

Having enough money in an accessible savings account to cover emergencies means you’re less likely to need to borrow when unexpected events occur. For example, if your car has an expensive repair bill, you could withdraw savings rather than take out a personal loan or put the costs on your credit card.

One factor that affects your credit score is your credit utilisation (how much credit you have available, i.e. your credit limit, versus how much you have used). If you have to put a significant expense on a credit card, this will cause your credit utilisation to go up, which will impact your credit score. Taking out a loan could possibly lead to a change in your credit score. Failure to repay that new loan on time can also harm your score.

Saving money can help you make sure you have funds to pay off debts

If you have spare funds available for withdrawal, this can help to give you the reassurance that you can keep up your current repayments. Keeping up with debt repayments is crucial for keeping your credit score healthy. Some people with savings will choose to pay off their debts early, but others may choose to earn interest on their spare funds and only turn to this if they struggle to repay from other sources.

It’s important to note that the above indirect benefits only apply if you can access your savings easily. If your savings are locked away in a long-term fixed account, you may incur a fee to remove your money to cover unexpected costs. It’s worth considering this when assessing the pros and cons of different types of savings accounts. Make sure you take time to read the T&Cs of your chosen account before signing up.

Whatever your savings goals, Shawbrook has a range of award-winning savings accounts to suit your needs. We like to keep things simple. We’re FSCS protected and with our eSavings platform you can open an account in minutes and manage your account securely 24/7.

If you want to regularly access your savings through an easy access account or you’re able to lock your money away in a fixed rate bond, there’s a variety of different types of accounts that could work for you.

As explained, none of our — or any type of — savings accounts directly affect your credit score. But having the financial security of savings can help to protect your score in other ways.

To find out more about our savings accounts, visit our main savings page.