How Do Bad Checks Impact my Credit Report?

First off, bad checks (bounced checks) are not reported to the credit reporting agencies.  Checking accounts are not considered credit, which is why a record of your checking account activity is not reported to the credit reporting agencies.  It’s the reason why debit card accounts are not part of your credit reports.  However, they can eventually show up…but indirectly.


If you don’t pay the fees and the original amount of the bad check, the bank could turn your account over to a 3rd party collection agency.  Collection agencies do report to the credit reporting agencies.  Collections are considered negative and can hurt your credit reports and credit scores. They can remain on your credit reports for seven years.

Line of credit

If your checking account is attached to a line of credit (also called “overdraft protection”), the line of credit can be reported to the credit reporting agencies.   The line of credit account provides you with funds to avoid a bounced check and the associated fees.  The credit limit is much lower than that of a credit card. You pay interest on the amount of the bad check and often an annual fee for the overdraft account.  It is important to pay this account on time, so that it doesn’t impact your credit negatively.

Database of bad checks

Even though bad checks are not reported to the credit reporting agencies, there are companies that maintain a database record of bounced checks.  The most well known company is called ChexSystems, another is Telecheck.  Bad checks stay on these databases for five years.  If you habitually write checks that bounce, you may not able to get another checking account.

Not being responsible with your money, such as writing checks without have the funds could carry over into your credit accounts.  You need to balance your checking account and not spend beyond your means. Just because you have checks in your checkbook doesn’t mean you have the money to cover them!

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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