When initially calling on a Wednesday, I spoke with a gentleman named Juan Regarding closed/charged off accounts on my credit report. He was very professional, and walked me through... read more
Robert G.4/05/2024
I recently reached out to IMAX Credit Repair to address several credit issues, notably a number of credit card accounts in collections. My experience with them, especially with Elizabeth, was... read more
Franco D.1/18/2024
Ali and his team are the best. Not only are they sweet and professional they really keep you updated throughout the process. They have helped me twice my entire life... read more
Judith Shenelle G.12/24/2023
I reached out to Ali Zane several months ago and he is the real deal. I am super satisfied with his expertise and he has earned my trust. Don't waste... read more
Tim A.10/08/2022
I've had the good fortune of being assisted by Ali in the past & would HIGHLY recommend him & his associates.
William V.7/22/2022
Ali is the best! He really takes his time explaining to you how you can fix your credit. A family member recommended him to me and he didn't disappoint. Building/fixing... read more
Denise K.1/21/2022
I was referred to IMAX credit by another credit repair firm in regards to removing late payments that were on my account. I scheduled a free consultation with Ali. Ali... read more
Jarred M.5/29/2021
Ali and Samantha are the best team! My credit score was stunned last year and I spent months working with the bank myself without a result. I was... read more
Rose Y.5/05/2021
Ali is amazing! Ali and Samantha were able to restore my FICO score to where the score should have been all along. I had one small ding due to an... read more
Dane B.3/31/2021
I moved and unintentionally missed my final utility bill. A few months later a late payment popped on my credit report. I consulted with Ali. He was... read more
Daniel K.3/04/2021
Does an Overdraft Affect Your Credit Score?
10 min read
Your credit score is one of the most important factors you should consider when making financial decisions. It can affect how much lenders will give you when it comes to a mortgage or loans. A strong score can help lower various costs, such as interest payments and utility bills.
Consumers prioritize having a strong credit score over other factors, such as missed payments and rising costs. However, there are also risks associated with overdraws and late payments. You’ll most likely be charged an overdraw fee when you accidentally overdraw. However, Current providers offer a $200 limit on this type of protection.
What Are Overdrafts and How Do They Work?
With your debit card, you can purchase funds from your checking account. You won’t have to worry about overdraws if your spending is within your bank account’s balance. However, only some people check their bank account before making a purchase. When an overdraft is made from your account, an overdraft fee will get imposed immediately.
How Overdrafts Affect Your Credit Score
Although overdraft fees can occur, they don’t usually negatively affect your bank’s reputation or customer standing. If you wait to pay them immediately, you might end up with a record in ChexSystems, a consumer reporting agency similar to a credit check. If you made a payment that was supposed to go to a creditor but didn’t, then a collections agency might get involved. It could affect your credit score for several years.
Bounced Checks And Unpaid Debts Can Ding Your Credit Score.
If you make a mistake in handling a transaction or check that you owe money to a certain business or person, such as a landlord or utility company, and you don’t pay them immediately, they can report you to the credit reporting agencies; an action that can affect your credit score. A payment or check bounce is usually caused by either your bank’s decision not to cover the transaction, or you’re opting out of the bank’s overdraft policy.
Your Information Can Get Sent To Chexsystems.
If your bank covers your transaction instead of declining it, you are liable for various fees, such as a continuous balance fee, if you don’t bring your account balance over the $0 mark. If you fail to pay these fees within a certain period, your bank may close your account, send the fees into collection, and forward your details to ChexSystems.
Do Checking Accounts Appear on a Credit Report?
On your credit report, every loan and credit card you have will indicate your borrowing and repayment activities to a lender. However, a debit card will typically pull money from your checking account, which is why checking accounts aren’t included in credit reports. If you overdraw your debit card or spend more than you have in your account, the fee will not appear on your report.
You should also be aware that ChexSystems, a banking reporting bureau, monitors your deposit accounts with credit unions and banks. It can keep track of various activities, such as bounced checks, overdrafts, and the closure of an account due to fraud.
If you’re trying to open a new bank account, you might be denied due to your ChexSystems report’s history of irresponsible behavior. However, this doesn’t affect your ability to use a credit card or loan. You can still clean up your ChexSystems report and get a second chance by opening a second-chance checking account with a bank that doesn’t use it.
Should I Keep My Overdraft Protection?
If you tend to overdraw your bank account frequently, consider getting out of the protection that comes with overdraw protection. It will allow you to avoid paying expensive overdraft fees. The transaction will be declined if you have insufficient funds in your account. It could result in an embarrassing situation at the cash register, but it’s worth it to avoid getting charged fees.
Another alternative is to link your checking account to a savings account, which is overdraw protection. This method allows you to have the funds available to purchase even if you have insufficient money in your checking account. However, this method will likely result in a lower fee for overdrafts not connected with a savings account.
When Should You Enable Overdraft Protection?
Even if you need more money in your account to cover your expenses, an overdraft protection feature can help you avoid getting rejected. This feature can allow you to make important payments on time even if you need more funds in your account. Although most banks automatically put this protection on your account, it could be better for some.
Another Way to Improve Your Credit Score
If you’re worried about keeping your credit score high, it’s important to remember that certain service accounts can affect it. For instance, phone utility bills and telecom bills have not previously counted toward your credit score. With the help of a credit score boost from Experian Boost, you can now get credit for paying your bills on time.
If you’re worried about maintaining a high credit score, remember that certain service accounts can affect it. For instance, phone utility bills and telecom bills have not previously counted toward your credit score. With the help of a credit repair expert from Imax Credit Repair Firm, you can improve your credit score by paying your bills on time.
