Do Bounced Checks Affect Credit Rating?

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Bounced checks affect a person's credit rating by keeping local banks from lending money to the individual. Bounced checks may also lead to the debt being sent to a collection agency which will negatively affect credit scores. Avoid years of higher interest rates by not bouncing checks with advice from a financial adviser in this free video on money management and credit scores.

Part of the Video Series: Credit Cards & Personal Loans
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Video Transcript

Hi my name is Matt McKillen, I'm with Innovative Financial Group. I had a question posed to me today do bounced checks affect your credit rating? Yes it does in a couple of different ways. One is obviously if you're bouncing checks with your bank, if you were to go back into that bank at a later date and you're interested in either taking a personal loan or a secured unsecured loan, they're not going to be too happy that you're writing checks that you didn't have the funds in your checking account to cover and it affects your credit rating with the bank. Secondly the bounced checked doesn't report directly to the credit bureaus, but a lot of times those clients that you sent you wrote those checks or the stores that you may have wrote those checks out to can send those checks out for collection. Now those collection actions can absolutely show up, I can guarantee you they'll show up on all three of the bureau under your social security number. The more collections that you have, the more of an impact that can have on your credit scores. So something as little as bouncing a 10 dollar check at your local Blockbuster video store could have a serious financial effect on your credit history going forward and could cost you hundreds of dollars in higher interest charges down the road. So please be very careful when you manage your account because bouncing checks can affect your credit rating. Again my name is Matt McKillen, I'm with Innovative Financial Group.


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