If you spend more money than you have in your checking account, it’s called an overdraft. The bank will pay the transaction if you've opted-in to overdraft transactions, but they’ll charge you an overdraft fee. Some banks even charge a fee each day your account is in the negative.
Fortunately, bank overdrafts won’t affect your credit score if you resolve them within a timely manner. If you ignore the bank’s attempts to get your account back in good standing, your debt may be sent to a collection agency and listed on your credit report. That’s when the overdraft will hurt your score. A collection account will remain on your credit report for seven years, even after you’ve paid it, unless you convince the collection agency to remove it.
Paying Your Credit Card With a Check
Your credit score could also be hurt if the check you wrote to cover your credit card payment is returned for non-sufficient funds. Your credit card company will charge you a returned check fee and your account will be reported as delinquent to the credit bureau. If the checks continue to be returned, your account will continue being reported delinquent and your credit score will take more damage. When you use a check to pay your credit card, make sure you have enough money in your account to cover the check and any other outstanding transactions.
Bank Overdrafts and Your Credit Score
While bank overdrafts may not directly affect your credit score, there may be a correlation between several bank overdrafts and a low credit score. If you frequently overdraft your checking account, it's a sign that you're spending more money than you really have. This could mean you're taking on more debt than you can afford to repay and that you've missed your credit card payments because you lack the money to pay your bills. These are two of the biggest influences on your credit score.
Your Bank's Credit Scoring System
Your bank may have an internal credit scoring system that uses information in your credit report along with your account history with that bank. If your bank does use this type of credit score, that specific credit score could be affected by your overdraft. It would only impact your ability to get a credit card or loan with that bank or its subsidiaries. Your FICO score and credit scores developed by credit bureaus and other businesses won't be affected by an overdrafted bank account except when the overdraft ends up on your credit report through a collection account or late payment.