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Will Overdraft Protection Affect My Score?

NEW YORK ( MainStreet) -- Q: I have overdraft protection on my checking account. Does this affect my credit score at all?

A: This is a bit of a tricky question. Generally speaking, overdraft protection itself -- which is when a bank or other financial institution fronts the money for charges that aren't covered by the funds available in a customer's bank account -- does not affect your credit score.

Some banks market overdraft products that are linked to a line of credit, and how consumers handle these overdrafts can be reported to credit bureaus -- for good or ill.

The reason: Most banks elect to either use their own money to cover the charges for a fee incurred each time a customer overdraws an account or allow customers to link their debit cards to other accounts they have, such as a savings account or credit card, to cover unwitting overdrafts.

Linking your overdraft coverage to your savings account isn't going to have any bearing on your score, since this information -- which doesn't involve any credit lines -- isn't reported to the three major credit bureaus. Linking your overdraft coverage to a credit card could affect your score, though, if you were subsequently unable to pay off the charges, but that really doesn't have anything to do with the overdraft protection itself. It simply shows up as an unpaid charge on your credit card bill.

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