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How Bounced Checks Affect your Credit Score?

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.