What Is a Deposit Account Score and How Does It Affect You?

A deposit account score is a specialized risk assessment tool used by financial institutions. It provides a snapshot of an individual’s banking history. This score is distinct from a credit score, which primarily evaluates borrowing and repayment behavior. While a credit score assesses creditworthiness, a deposit account score helps banks determine the risk associated with opening and maintaining deposit accounts, preventing potential losses from issues like overdrafts or fraudulent activities.

Key Factors Influencing Deposit Account Scores

Deposit account scores are generated based on an individual’s past interactions with financial institutions. Several key behaviors and events contribute to this score. Frequent overdrafts negatively impact a score, indicating a higher risk of future losses for the bank. Non-Sufficient Funds (NSF) transactions, such as returned checks or failed automated payments, are significant red flags.

Account closures, particularly those initiated by a bank due to negative balances, excessive fees, or suspected fraudulent activity, weigh heavily on a deposit account score. Unpaid negative balances also contribute to a lower score. Any reported or suspected fraudulent activity linked to past accounts can severely damage a score. Consistent positive account management, such as maintaining healthy balances and avoiding issues, can also play a role in a favorable score.

How Financial Institutions Use Deposit Account Scores

Financial institutions utilize deposit account scores to inform various decision-making processes. When an individual applies for a new checking or savings account, banks may consult these scores to decide whether to approve the application. A low score might lead to a denial or a requirement to open a “second-chance” account, which often comes with more fees and fewer features.

These scores also influence the types of services and features offered with a new account. Eligibility for check-writing privileges, daily debit card limits, or overdraft protection may depend on the applicant’s deposit account score. Banks use these scores as a risk mitigation tool, helping identify potential high-risk customers and reduce financial losses. Financial institutions may also use these scores for ongoing monitoring of existing accounts to detect changes in banking behavior that could indicate increased risk.

Accessing and Reviewing Your Deposit Account Score

Individuals can request a consumer report from specialized reporting agencies. The primary agencies that collect and maintain deposit account history are ChexSystems and Early Warning Services. Under the Fair Credit Reporting Act (FCRA), consumers are entitled to a free copy of their consumer report from these agencies at least once every 12 months.

To request a report, individuals can visit the agency’s website, call customer service, or send a mail request. The report will detail account history, including reported negative activities like overdrafts or involuntary account closures. If inaccuracies are found, disputing the information is important. Consumers should contact the reporting agency directly, providing explanation and supporting documentation. The agency typically has 30 days to investigate and respond.