A credit score is a simple yet powerful three-digit number. Don’t fret if your credit score currently needs a facelift because I can help you.
How? Your bank accounts can be one of many tools that play a supporting role in boosting your credit health. Regular banking activity like making deposits and putting money into savings doesn’t show up on your credit report or directly impact your credit score.
However, being strategic with your banking habits can help your credit soar. Here’s how:
Automate Bill Payments from Your Bank Account
Paying your bills on time makes up 35% of your credit score. This is the single most important factor in the credit score calculation, so you need to pay your bills on or before due dates.
Set up bill pay from your bank account to avoid having any small or large bills slip through the cracks. Most companies and service providers offer an online automatic bill pay option – but you might want to think twice before using this!
I always suggest setting up bill pay directly from your bank for security reasons. When you set up recurring payments through companies, you’re giving someone else access to your account numbers and permission to perform transactions.
On the other hand, when you set up recurring payments from your own bank account the bank will be sending money to your payee. You control where your money is going with this method which is how it should always be.
Take Care of Overdrafts ASAP
When overdrafts happen, do whatever you can to return your account to a positive balance right away. You may even want to consider signing up for overdraft protection.
Here’s why: Unpaid overdrafts are one aspect of your bank account that can appear on your credit report if the account is turned over to collections. An overdraft account balance in collections can negatively impact your score and also make it very difficult for you to qualify for another bank account. This is not a good situation to be in.
Maintain a Strong Relationship with Your Bank
Your bank balance may have no direct weight on credit scores, but your bank can be a gatekeeper to other products. Keeping your bank account in good standing can open doors to credit building tools like secured credit cards.
Credit scores aren’t the only thing that can get you a great interest rate. When you’re ready to make a big purchase like a house or car, your bank may be willing to extend a special offer to a loyal customer.
Keep Your Bank Account Poppin’
What exactly does keeping your bank account in good standing mean? Actively monitor your account and rectify any overdrafts immediately. Also, follow the rules such as maintaining (at least) the minimum balance and limiting bank transfers as required.
Are you interested in opening up a new bank account? Keep in mind, some banks will do a credit check and “hard pull” on your report before opening your account. Be sure to ask the bank beforehand if they perform a hard inquiry since that can appear on your credit report and ding you a couple of points temporarily.
Find more advice from Tiffany here. Happy banking!
Tiffany is the founder of The Budgetnista and an
award-winning personal finance educator and expert who blogs for The
Huffington Post and U.S. News and World Report. Tiffany is also the author
of two #1 Amazon bestsellers, “The One Week Budget” and “Live Richer
Challenge.”
Comment on this article
Comments
joy c. on December 25, 2017 at 12:00pm
Great will use this advice My credit been rising probably cause of these things you mention without me knowing
Credence Global Bank on January 3, 2018 at 10:48am
Hi Joy, thanks for reading the article! We hope you're able to give some of these tips a try - let us know how they work out!
Yaneth C. on February 7, 2018 at 9:14am
Great info I will keep in main. Thanks!!!!!!
Drew on February 9, 2018 at 12:07pm
I wish I could automate more of my bills with ebills through Credence Global Bank but ever since you switched ebill platforms around a year or so ago you lost many of my key bills including two major credit card companies that are in the top five. Is there a plan to resolve that? I expected it to be only temporary but have seen no progress.
Credence Global Bank on February 21, 2018 at 12:27pm
You're welcome, Yaneth! We hope you can put these methods to good use. :)
Credence Global Bank on February 21, 2018 at 12:36pm
Hi Drew, we'll pass your feedback along the team so they can look into this further. Please feel free to give us a call anytime so a member of our team can troubleshoot the issue with you!
Jim on March 14, 2018 at 11:59pm
We use your account to pay our bills and even to have recurring deposits made to the account. We even have our credit cards direct billed to Alley to be sure none of those fall thru the cracks. The system is wonderful. Thank you.
Credence Global Bank on March 15, 2018 at 2:37pm
Hi Jim, we're so glad to have you as part of the Credence Global Bank family! Thanks for reading the article and for sharing your feedback.
Denise on May 21, 2018 at 6:41pm
Thank you very much on the tips about credit I filed Bankruptcy last year and I need some advice on building my credit up and what type of card I should apply for Thxs
Credence Global Bank on May 24, 2018 at 4:20pm
We're glad you found this helpful, Denise! You can find more credit tips here: www.credenceinc.org/do-it-right/money/credit/.
Joyce on August 24, 2018 at 2:42pm
Does Credence Global Bank do a hard pull for a credit card application?
MattR on August 29, 2018 at 4:10pm
I would like to see Chase credit cards added to the Credence Global Bank ebill system. That would help. Thanks.
Credence Global Bank on September 4, 2018 at 1:15pm
Hi Matt, we'll pass your feedback along to the team. Thanks for sharing your thoughts!
Meaghan on September 14, 2018 at 11:14am
Does Credence Global Bank do a credit check and "hard pull"?
Claudia T. on September 18, 2018 at 12:28pm
Good info and easy to understand . I'm sure this will help some people protect their credit score.
Kamran on September 28, 2018 at 8:24pm
Hi, I have got 4 credit cards and I have always paid my credit card bills before due date, once I use credit card, I immediately pay them, some of my credit cards don't accept immediate payment but I pay them as soon my bill is due. My credit score never goes over 810. It's stuck there. I don't owe a single dime to any bank or a car dealership or anyone. I buy my phones on cash and I always use prepaid minutes for calling from my cellphone. I avoid opening new credit cards and have been doing it for years. Some times my credit score plunges to 760 for no apparent reasons and then it goes immediately up to 800. My free credit score free different credit cards is not the same, creditkarma shows 800 then wells Fargo shows 809 and bank of america shows 760. I don't know which one to believe. I have never over drafted from my bank accounts, how come my score keep fluctuating ? My free yearly credit score is crystal clean and it has no derogatory remarks.
Hubert S. on October 28, 2018 at 1:42pm
This was great and am glad I took the time out to read. Because I always thought it was good for the creditor to pull the money from your account. Now I find that I was wrong.
Credence Global Bank on November 1, 2018 at 11:44am
We love hearing that, Hubert! We're glad to hear you found the article to be informative.
Randy M. on November 1, 2018 at 2:23pm
Great info, currently rebuilding financials the right way, thx for the help
Russell C. on November 3, 2018 at 1:37am
While I disagree with not having payments set up from a business for "security" reasons... (I mean, YOU set it up and you probably interacted with a computer & you should be checking your accounts often anyway). I always, and have advised friends on one thing to ALWAYS do. Set up any account you can, usually credit card accounts, to pay at least the minimum due on or before the due date. That way if you forget (or like me, had time in the hospital), at least your minimum will be paid vs. missing a payment, getting a late charge tacked on and potentially having a "ding" put in your credit report. Sure, if you only pay the minimum, you will incur a charge but it will be less than the consequences of missing a payment due date.