Any Downside to Opening New Accounts to Support the Hobby?

[madwest]

Does anyone know of any downside to keeping small balance accounts at multiple banks?

I'm thinking specifically of credit score as one concern. Does anyone know for sure if having a "new" savings or checking account dings your credit at all? I am sensitive to it because I had a credit score of 805 but after I refinanced my mortgage, it dropped to 769. I was shocked. When I asked about it, I was told that it was because the average age of open accounts went down significantly (I replaced an 8yo mortgage with a 0yo mortgage) and because I shopped around for interest rates (I ended up with 3 hard inquiries that all counted).

I would like to open accounts at 2 banks that have lots of branches in my area so that I could spread out the dumping that I plan to do some day. I just don't want to suffer any on my credit score.

 

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[RP4L]

AFAIK opening accounts shouldn't affect your score.

I did some googling and found this: http://www.bankrate.com/brm/news/DrDon/20061229_credit_report_ChexSystems_a1.asp

 

[byrne3]

Yes, it absolutely will affect your credit score anytime you open a new account. Hard credit inquiries are becoming standard even for savings accounts. It will only be temporary though.. I think the big thing is to not be constantly opening and closing new accounts..

 

[DarkRider23]

Yes, it absolutely will affect your credit score anytime you open a new account. Hard credit inquiries are becoming standard even for savings accounts. It will only be temporary though.. I think the big thing is to not be constantly opening and closing new accounts..

Where are you getting your info from? Opening a bank account doesn't hit your credit score at all. Your credit score has to do with your lending practices, not your banking practices.

 

[byrne3]

Yes, it absolutely will affect your credit score anytime you open a new account. Hard credit inquiries are becoming standard even for savings accounts. It will only be temporary though.. I think the big thing is to not be constantly opening and closing new accounts..

Where are you getting your info from? Opening a bank account doesn't hit your credit score at all. Your credit score has to do with your lending practices, not your banking practices.

I get my information from experience.. i.e. I open a savings account and then see I have a hard credit inquiry.

Here is a link from the SAME website as posted above, that contradicts what was stated, i.e. Opening an account can affect your credit score. Choose to believe what you want to believe, ok?

http://www.bankrate.com/finance/savings/banks-checking-credit-scores-more-often-1.aspx

 

[quiksilver]

As far as i know according to my mortgage broker [who may be wrong] , its not bank accounts that affect your credit score tho if it comes with a credit card that may be a different storey.

As for the downsides you will need to

1. Keep track of minimum balances
2. Keep track of inactivity times
3. Be aware of things like charges for paper statements
4. Be aware of linked credit or debit cards or linked saving and checking ,and charges or differences related to them
5. Watch out if your mortgage is with a bank you use and the mortgage is sold [differnt minimum balance now]
6. Read the mail as any of these may [and will change]

I have over 24+ bank accounts [some have linked saving and checking] and find cheap CDs work best at pick up banks [much less to keep track of ] the cheapest sav or ck work best at banks with coin counters [when the machine goes haywire it is easier to deposit into your account ].

feal free to pm me for questions on multiple accounts

 

[Piledriver]

I can give you a whole book on that one.

I tried to get onto my daughters account to make ordering halves easier. I got rejected !!

They said I should look at my credit report, because (they couldn't tell me what) something must be bad wrong with it.

And guys, I am completely clean.
I own my house, don't have a mortgage.
I don't borrow ANYTHING.
I don't have any credit cards.
I don't have any loans at all.
I don't even have direct deposit or any bounced checks.
I DON'T ANYTHIN' TO ANYYYYYYYYYBODY.

But I got rejected, so I sent for my credit report and guess what?!!

Opening six bank accounts in 2 months is a crime to somebody I have never met that sits behind a desk.
Still sore about that one.

But I'm takin' that credit report to the manager of that bank so that they won't have their finger on the (call the cops)button when I walk in.

Oh Brother........

 

[quiksilver]

I can give you a whole book on that one.

I tried to get onto my daughters account to make ordering halves easier. I got rejected !!

They said I should look at my credit report, because (they couldn't tell me what) something must be bad wrong with it.

And guys, I am completely clean.
I own my house, don't have a mortgage.
I don't borrow ANYTHING.
I don't have any credit cards.
I don't have any loans at all.
I don't even have direct deposit or any bounced checks.
I DON'T ANYTHIN' TO ANYYYYYYYYYBODY.

But I got rejected, so I sent for my credit report and guess what?!!

Opening six bank accounts in 2 months is a crime to somebody I have never met that sits behind a desk.
Still sore about that one.

But I'm takin' that credit report to the manager of that bank so that they won't have their finger on the (call the cops)button when I walk in.

Oh Brother........

odd , I have excellent credit , refinanced recently and had no problem with the multiple accounts

 

[db23]

Chex Systems inquiries can hurt you when you are opening up accounts or applying for things with banks and credit unions. Too many Chexs Systems Inquiries can raise a red flag.

Some banks and MANY credit unions also put a hard inquiry on your credit report when opening an account.

 

[Piledriver]

Chex Systems inquiries can hurt you when you are opening up accounts or applying for things with banks and credit unions. Too many Chexs Systems Inquiries can raise a red flag.

Some banks and MANY credit unions also put a hard inquiry on your credit report when opening an account.

Yep, you said it.
It's not how many accounts you have BUT HOW RECENTLY YOU HAVE OPENED THEM.
Plus, the banks make inquiries and that looks bad to Chex Systems.

 

[madwest]

Thanks so much everyone. This is precisely what I was looking for - first hand experience. I did some more research in light of what you all have indicated as first hand experiences.

Piledriver's problem/experience might be an issue with the ChexSystem report rather than the Experian/Equifax/TransUnion report. Or, Piledriver's accounts might have "credit-like" features attached to them. Either way, it tells us we need to at least think about what we're doing before we jump in. It is nonsense to me that everyone (including DishTV and American Family Ins.) thinks they need to check your credit these days.

I'll try to boil down what it looks like to me:

- Banking behavior (opening/closing accounts, overdrafts, NSF checks, etc) is always reported to ChexSystems (http://en.wikipedia.org/wiki/ChexSystems), but not always to Experian/Equifax/TransUnion. Reporting to ChexSystems doesn't seem to affect FICO score, but could dramatically affect your doing business with banks or CreditUnions.

- Opening of accounts that have credit-type features (overdraft protection, visa, m/c, instant credit, etc) will always have a hard credit inquiry to Experian/Equifax/TransUnion. That could ding the FICO score.

- Opening a deposit account with credit-type features will drag down your average age of open accounts. That could ding the FICO score.

- It isn't clear to me if having a debit/ATM card with a Visa logo on it causes the reporting to Experian/Equifax/TransUnion
or not. This might explain why some say opening a deposit account results in credit inquiry.?.?

- It does seem like you would need to give explicit permission (in the application) for the bank to do a hard credit inquiry. If the application for opening the account includes this permission, I just won't submit the application.

I am glad I asked for members' first hand experiences. I'll scrutinize the application form closely and ask the personal banker directly about doing a credit inquiry. And of course keep an eye on the 6 gottcha's that Quiksilver pointed out.

Thanks again. I going to be a full-fledged CRH'er yet.