You have a lot of things to consider when you're starting your small business – one thing to think about is opening a business bank account.
With your personal finances, you’ll probably be aware that your credit score is an important thing to keep in mind. When it comes to business finances, it might not be as clear. So, does applying for a business bank account impact your credit score?
Does opening a business account impact your credit score?
The short answer is, in most cases, no.
How banks use your credit score when you open an account can vary from bank to bank.
Applying for a business account at Mettle won’t affect your credit score. We use third-party checks to confirm your identity to comply with banking regulations, but this will only be a ‘soft check’ on your credit report, which will have no impact on your score.
These checks only take into account your name, address history and citizenship status – instead of focusing on your credit history itself.
Why doesn’t applying for a business account impact your credit score?
It’s kind of in the name. Your credit score is used when you want to take on credit, such as credit cards, a loan or finance options.
Your credit score and lending history let banks and lenders know how likely it is that you’ll be able to repay the credit you take on, helping them give out loans in a responsible way.
As applying for a business bank account (or most bank accounts in general) doesn’t immediately give you any credit, unless you’re also applying for an overdraft, there’s no need to perform a ‘hard check’ on your credit score. You’re just applying for an account to place your money.
A bank may look at your credit score when you apply for an account. If they do, this will more than likely be a ‘soft check’, which doesn't impact your score.
Most banks will make it clear before applying for an account the types of checks they’ll make when you apply for an account. For more information on eligibility for opening a Mettle account, check our website.
