How to Get an Overdraft Loan Approved with Bad Credit

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Overdraft protection is offered at most banking institutions to protect its customers. In the event you overdraw your account, your overdraft protection--either a line of credit or a separate account--kicks in to make up the difference. This saves you additional overdraft fees and bounced check fees. With bad credit, it can be difficult to get overdraft protection, but you can set up a tethered system so that you'll be protected.

Line of Credit

  • Check your credit report. (See Resources for a free copy.) Without at least a 600 FICO, you'll probably have no luck getting even a small line of credit approved for overdraft protection at most banks.

  • Open a checking account at a credit union. If you are a member of a credit union, you'll have a better shot at getting approved for a small line of credit for overdraft protection.

  • Continue to rebuild credit if you're initially turned down for overdraft protection. Pay all bills on time for 6-12 months, and make sure to pay off any judgments and charged-off accounts.

  • Reapply at banks and credit unions when you have a higher credit score.

Bank Account

  • Open a savings account if you do not currently have one. Deposit at least $25 into the savings account.

  • Speak with a bank representative about linking your checking and savings accounts.

  • Have the representative link your savings to your checking so that in the event of an overdraft, the difference in the overdraft is covered by the balance in your savings.

  • Continue to add a few dollars a week to your savings until you've built enough of a cushion to support several overdrafts.

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