How Bounced Checks Affect your Credit Score?

Aug 11, 2015

Unknown to many, a bounced check can affect your credit score, though not always. If the check bounces and you take responsibility and pay it promptly, then it will not likely be reported to the credit bureau. The problem is when a check bounces and you don’t cover it in time. If it is passed to a collection agency, then it will most likely affect your credit score.

Typically, a collection agency will wait for 90 days to see whether you pay the check. If the period passes before you make the payment, then they may report the bounced check to the credit bureau. Such a report will definitely be reflected in your credit score.

Not all companies will turn over bounced checks to a collection agency. Those that are likely to turn your bounced checks to an agency include; grocery stores, utility companies, and chain stores. However, this doesn’t mean that other companies will never forward your bounced checks to a collection agency. To stay on the safe side, it is better to assume that all bounced checks will be turned over to an agency. So, as soon as you discover that the check bounced, you need to move swiftly to cover it.

A bounced check is also likely to be reported to the consumer information agency. These agencies in turn send your credit information to entities such as; payday loan companies, insurance providers, utility companies, and car dealers/auto financing companies.

So, even if the bounced check doesn’t affect your credit score, it may still affect you in many other ways. It may make it very difficult for you to get loans and may even make it impossible to access new utilities when you move. This is why you need to balance your books regularly to ensure that all bounced checks are covered.

There are usually a few other solutions. For instance, you can sign an overdraft protection with your bank which allows overdraft of your account until such a time when you make a deposit. However, this option can be very expensive because the related fees are typically high.

A better and less costly option would be to find a check processing service provider who can help you take care of issues such as bounced checks easily. A well-known provider, EMB, can be found at You will pay less and forget about the stresses that come with bounced checks.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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