How do banks decide if u can have an overdraft?Do they cred check u or just go by how u have used ur account?

Question

What sort of system do they use? If anyone knows please let me know :)

Answer 1

It's like an extension of credit so if you have bad credit you can't get an unsecured overdraft.

However, if you have bad credit you can have an overdraft from your savings, so any money in your savings account will act as an overdraft protection.

Answer 2

Bank Overdraft Protection is actually a line of credit that link to your checking account. Banks sometimes used different names for this product. But it requires a credit check...that is how you can tell that you have a "real" over draft link to your account, which is a guaranteed to pay your checks up to the credit line (like a credit card) when your checking account don't have enough money to cover the checks. But as you are borrowing money from the bank, there are always fees and interest involved. The credit check is the same as all major credit cards, mortgage loan, and auto loans... your FICO score. Personally, I do not prefer to pay any fees and interests, so I don't like overdraft protection link to my account. I just pay attention to my balance all the time and not to overdraft (also to avoid overdraft fee, or return item fee).

Answer 3

An overdraft account is a line of credit and you have to submit an application for it. It is the same as applying for a credit card, but it is a different type of credit. Credit cards are charged an APR percentage on the balance of what is owed, where a LOC the percentage is added into the payment amount.

Answer 4

Overdraft protection is a line of credit so your bank will check your credit history. The first time I applied, I was denied due to insufficient credit history.

Answer 5

i work at a credit union in pennsylvania. our overdraft is called courtesy pay. a member is elligible for it if they have $500 or more in deposits made the month before. then we pay the check instead of it bouncing but you would get charged a fee. we dont do anykind of credit check. we do a check on check systems before we open accounts for members to see if they have had prior banking history that has been reported.

Answer 6

Goes on ur credit rating. I have quite a bit of money going in and out of my account due to housing benefit, student loans/grants etc but due to stupidity wi catalogues in my teenage years i still have unpaid debts which have lowered my credit rating and make it impossible for me to get and overdraft or credit card.

Answer 7

I know wells fargo has to do a credit check on overdraft protection unless you open a savings account with them...

Answer 8

Well, with my bank I have a checking account with a debit card, that can be used as credit as well. When you use it for credit, the transactions take a few days to go through, sometimes weeks. While debit comes out right away. It seems like my bank will wait to ring through a credit transaction until im low on cash and then shoot them through, overdrawing me like a mofo. Its hard to keep track of something you paid for 3 weeks ago, but got billed on yesterday............I use Wamu btw

Answer 9

credit check. mty friend has a low credit rating and cant get an overdraft AT ALL, however depnding on the type of bank account u have can affect it too, but it is based on credit ratings.

Answer 10

My bank went by credit check on the people whose names are on the account.