Overdraft on Checking Accounts

Overdraft on bank accounts is a great type of credit for consumers.  Not only does it protect against bounced checks but it is also viewed by the scores as a peice of revolving credit (like a credit card).  It is unsecured debt, when used, so it is considered like a personal loan. 

As we know the more credit you have, up to 30 accounts, the better it can be for you score.  So if you have overdraft make sure to use it.  Some overdraft accounts are like credit cards where you must make a monthly payment on time.  If you do not make the payment you will experience a late mark on your credit and this can be devastating to the credit score.  Other overdraft accounts automatically take the money owed once funds are deposited in the account it is associated with.  Make sure you know what type you have if you apply for this credit tool.  Many of these overdraft accounts do not notify you when funds are due. 

Once again it is important to note that opening and closing credit hurts your credit for a year so be careful to time it right is you are thinking of beginning an overdraft account or ending one.

“Great credit brings great opportunity”