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.
Check out the scope to hear answers to all the questions asked:
Do you have questions about credit?
Join our live video chat every Tuesday and Thursday at 2:30 p.m. ET on Periscope. Rod Griffin, Director of Public
Education at Experian, is available to answer your questions live.
Scoped on: 11/10/2016
Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.