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Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
0

Re: Bounced checks hurt my approval

A bounced check is considered a crime in many states. A bounced check can be reported and at times they are (not always). You failed to pay your debt in a timely fashion and that can be reported. For example, dont pay your electric bill, or bounce a check with them (especially several times), then tell me its not reported on your credit reports.

 

A check with overdraft protection is not considered a bounced check in the same sense as being a crime.

 

Im sure the OP didnt volunteer to her LO or Broker she bounced many checks.

Good Luck
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Valued Contributor
Mike_B03
Posts: 1,146
Registered: ‎11-30-2012
0

Re: Bounced checks hurt my approval

Hmm, I never knew that. I guess it would make sense if you wrote the check, it bounced, and you didn't end up making a new check or pay the debt some other way. 

Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
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Re: Bounced checks hurt my approval

LOL! @ StartingOver :smileyhappy:

It seems complex but there is nothing new under Sun, meaning that the same things are clearing every month and I use my credit cards for almost everything so basically the full amount of my paychecks are always sitting in Checking. I transfer a small amount over to savings every week so the chance for a bounced check is pretty small.

When I get ready to fire off a round of bills to my credit card, etc. I do a quick tally of the minuses and say that is my ending balance for the week and I plop that number into my head (I am an Engineer so I am really good with numbers). I don't keep a spreadsheet projected 6 months in the future, no. I used to and it got me in trouble so now I exercise my brain and I always underestimate how much money I have. My checking account gets low about once a month, and when it is low, I rundown memory lane to see if anything is scheduled to clear and if yes, if I need savings to cover it, I pull it over. If not, I just keep a close eye on it and it works like a charm.

Do I recommend my method, no. It is always better to know where you stand to the penny. For me, the behavior of watching my accounts and paying the same ole bills has built an internal rhythm and that rhythm is memorized. :-)
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Bounced checks hurt my approval

I also agree with what tooleman said. I have a ton of cash floating between checking and savings as I get about $1300 a week deposited in my checking account from my job and with everything going to credit card, I let my checking account go into auto mode. As tooleman said, I also got caught a couple of times and the credit union snatched money from savings and I hate when they do that because they only transfer the amount for the charge and I only get 8 transfer a month. If it happens, I usually transfer over the amount needed plus cushion before the next incoming charge hits. But I have been super lucky a couple of times I saw this because the charge was still pending so I hurried up and made the transfer myself before it was fully processed.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
New Contributor
BCullum
Posts: 157
Registered: ‎01-09-2013
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Re: Bounced checks hurt my approval

I haven't had an NSF or a Overdraft fee since I was 16. With mobile banking, online banking, and telephone banking this should be a thing of the past. Plain and simple if you dont have a surplus to cover something dont buy it. Always have a surplus in your checking account. I know that savings draws interest...but you wipe out a month of interest or more when they charge you 33 dollars for not having the funds to cover a purchase.

Lender Pull EQ 745 EX 734 TU 722
New Member
Jonsey62
Posts: 5
Registered: ‎01-02-2013
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Re: Bounced checks hurt my approval

Just to clarify my terminology.  I mean overdrafts.  The bank has always covered the check/debit. I have never had to go pick up a check or anything.  The bank pays and then charges me to the hilt.   I went in to the bank today and turned off the where they would approve me going into the negative on my debit card.  When I get paid again I will put money into a coushin for my checking account so this doesn't happen again.

 

IThe persoon who told me I couldn't get approved with over 2 overdrafts within a year was with Quicken Loans.  I have heard it depends on the Underwriter.  Is this true?

I also was working with someone at PNC.  Maybe they are looking at me closer because I am self employed.

New Member
Jonsey62
Posts: 5
Registered: ‎01-02-2013
0

Re: Bounced checks hurt my approval

Are bounced checks different from overdrafts?   in the way the lender looks at them?

New Member
Jonsey62
Posts: 5
Registered: ‎01-02-2013
0

Re: Bounced checks hurt my approval

Which lender did you use?

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Senior Contributor
StartingOver10
Posts: 4,581
Registered: ‎03-06-2010
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Re: Bounced checks hurt my approval

[ Edited ]

Jonsey62 wrote:

Are bounced checks different from overdrafts?   in the way the lender looks at them?


Bounced checks are the same as overdrafts as far as the u/w is concerned. The funds weren't there when the check/debit/ACH etc  was presented.


Your file will be reviewed much more carefully because you are self employed. It is also typical for some underwriters to ask for more than two months of bank statements if you are self employed. They will probably want both your business account and your personal account bank statements as well as business tax returns and personal tax returns. If you are self employed you go through a more riguous approval process.

Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
0

Re: Bounced checks hurt my approval

Quicken Loans?!? You are taking the tough route by going to these industry giants for a loan. I would go see a local broker as they may let them slide.

I don't have overdraft protection and a long long time ago, I bounced a check. The bank was kind enough to cover the check for me when they didn't have to. I got an NSF fee and the check was considered bounced. With overdraft protection, they give you a line of credit to cover bounced checks. But, the check is unfortunately still considered bounced if you don't have savings to draw from to cover it. Excessive use of an overdraft line of credit looks like financial mismanagement by a lender. It is only there to protect you if you make a mistake and not for convenience as it shows lenders you are living beyond your means. I know you never had anyone go after you for a bounced check because the bank paid it but it is still considered bounced as you get charged a NSF fee. The only difference is, when the bank pays, that the payee doesn't get a fee on their end. If the bank doesn't pay, your check bounces in their account as well and then the merchant/payee will come after you for the original amount plus the bounced check fee. If you cash a check from a friend that doesn't have funds in their account, you will get a bounced check fee and any checks or debits you charged dependent on that person's check, will also bounce and you can rack up a ton of NSF fees there, which also looks bad to lenders as it shows too much financial trust in the wrong people. So it is always best to call your friends bank and verify sufficient funds before cashing their check.
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