Score Advice

Does an overdraft on my checking account affect my credit score?

Checking account overdrafts do not directly affect your credit scores. However, if the overdraft amount is sent to collections it could appear in your credit report and hurt your credit scores.

The term "overdraft" refers to writing a check or attempting to make a debit card purchase for more than the balance in your checking account. It's also called an "insufficient funds" check or debit charge.

Overdrafts are not reported to credit reporting agencies, but if the amount of the overdraft is sent to collections, that account will be reported and will hurt your credit scores.

While overdrafts are not reported to credit reporting agencies, they are reported to debit bureaus. Debit bureaus are like credit bureaus, but they collect and maintain information about your checking accounts. A poor debit bureau report can make it difficult to pay with checks or your debit card.

Debit bureau reports also may be included in background checks and for reviewing rent or lease applications, and for new checking account applications. Ensuring that you manage your checking account responsibly is just as important as managing your credit wisely.

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Scoped on: 11/10/2016

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