Will adding overdraft protection to my checking account result in a HP?

[red259]

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

[Anonymous]

It depends on the bank/credit union

It is a credit product so there is a very good chance they will do a HP to obtain it. 

[sarge12]

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@red259 wrote:

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

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At least for my credit union, not only does it require a HP when initiated, but requires an annual HP to make sure I still meet the credit requirements...but they are extremely conservative smaller credit union. The added bonus is that by being so conservative with the members capital, they pay more interest, and charge less interest and also provide an annual relationship bonus to the members. The important thing to remember about credit unions is they are owned by the members, and are non-profit, so limiting losses directly affects the benefits they can return to the members...so the HP's acually benefit me. Once you understand that, the annual HP is easier to accept. The last 2 years my annual bonus has been about 70 dollars a year, in addition to making interest even on checking and totally free checking. Would never even think of using a bank for checking and savings.

[red259]

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@sarge12 wrote:

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@red259 wrote:

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

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At least for my credit union, not only does it require a HP when initiated, but requires an annual HP to make sure I still meet the credit requirements...but they are extremely conservative smaller credit union. The added bonus is that by being so conservative with the members capital, they pay more interest, and charge less interest and also provide an annual relationship bonus to the members. The important thing to remember about credit unions is they are owned by the members, and are non-profit, so limiting losses directly affects the benefits they can return to the members...so the HP's acually benefit me. Once you understand that, the annual HP is easier to accept. The last 2 years my annual bonus has been about 70 dollars a year, in addition to making interest even on checking and totally free checking. Would never even think of using a bank for checking and savings.

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My account is not with a credit union its with a large bank. The feature does not mention anything about a credit pull being required. 

[sarge12]

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@red259 wrote:

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@sarge12 wrote:

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@red259 wrote:

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

---

At least for my credit union, not only does it require a HP when initiated, but requires an annual HP to make sure I still meet the credit requirements...but they are extremely conservative smaller credit union. The added bonus is that by being so conservative with the members capital, they pay more interest, and charge less interest and also provide an annual relationship bonus to the members. The important thing to remember about credit unions is they are owned by the members, and are non-profit, so limiting losses directly affects the benefits they can return to the members...so the HP's acually benefit me. Once you understand that, the annual HP is easier to accept. The last 2 years my annual bonus has been about 70 dollars a year, in addition to making interest even on checking and totally free checking. Would never even think of using a bank for checking and savings.

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My account is not with a credit union its with a large bank. The feature does not mention anything about a credit pull being required. 

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And it may not...a banks responsibilities are to their stock holders and their main objective is to make a profit for the stockholders. They would likely charge more interest than a credit union and usually does not provide free checking. The bank will usually take more risk in return for greater profit. The credit union on the other hand, being owned by the members and being not for profit, is often very risk averse. The member/owners vote for the board of directors and often even on the policies of the credit union. Their main objective is to provide better services and benefits for the members who own the credit union, not provide profits for the stockholders. It is why the Auto loan rates at the credit unions I belong to start at 1.75% at one and 1.95% at the other. No bank offers such rates, because they would find it hard to make a profit doing so.

[Anonymous]

My main banking is through Capital One, and they do a hard pull for their overdraft protection; at least they did in my case. 

[red259]

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@sarge12 wrote:

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@red259 wrote:

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@sarge12 wrote:

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@red259 wrote:

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

---

At least for my credit union, not only does it require a HP when initiated, but requires an annual HP to make sure I still meet the credit requirements...but they are extremely conservative smaller credit union. The added bonus is that by being so conservative with the members capital, they pay more interest, and charge less interest and also provide an annual relationship bonus to the members. The important thing to remember about credit unions is they are owned by the members, and are non-profit, so limiting losses directly affects the benefits they can return to the members...so the HP's acually benefit me. Once you understand that, the annual HP is easier to accept. The last 2 years my annual bonus has been about 70 dollars a year, in addition to making interest even on checking and totally free checking. Would never even think of using a bank for checking and savings.

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My account is not with a credit union its with a large bank. The feature does not mention anything about a credit pull being required. 

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And it may not...a banks responsibilities are to their stock holders and their main objective is to make a profit for the stockholders. They would likely charge more interest than a credit union and usually does not provide free checking. The bank will usually take more risk in return for greater profit. The credit union on the other hand, being owned by the members and being not for profit, is often very risk averse. The member/owners vote for the board of directors and often even on the policies of the credit union. Their main objective is to provide better services and benefits for the members who own the credit union, not provide profits for the stockholders. It is why the Auto loan rates at the credit unions I belong to start at 1.75% at one and 1.95% at the other. No bank offers such rates, because they would find it hard to make a profit doing so.

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Ok, but my question really only has to do with whether or not there would be a HP to add overdraft protection. 

[red259]

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@Anonymous wrote:

My main banking is through Capital One, and they do a hard pull for their overdraft protection; at least they did in my case. 

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Thanks, maybe what I will do is contact my bank and ask them then. This is something that pops up everytime I log into my account., because the laws were changed years ago so they can't just put you into overdraft protection without your permission. 

[UncleB]

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@red259 wrote:

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@sarge12 wrote:

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@red259 wrote:

My bank is offering to add overdraft protection to my checking account. If I add this feature would it result in any sort of HP or showup somehow on my credit report? 

---

At least for my credit union, not only does it require a HP when initiated, but requires an annual HP to make sure I still meet the credit requirements...but they are extremely conservative smaller credit union. The added bonus is that by being so conservative with the members capital, they pay more interest, and charge less interest and also provide an annual relationship bonus to the members. The important thing to remember about credit unions is they are owned by the members, and are non-profit, so limiting losses directly affects the benefits they can return to the members...so the HP's acually benefit me. Once you understand that, the annual HP is easier to accept. The last 2 years my annual bonus has been about 70 dollars a year, in addition to making interest even on checking and totally free checking. Would never even think of using a bank for checking and savings.

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My account is not with a credit union its with a large bank. The feature does not mention anything about a credit pull being required. 

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If you can share which large bank you'll get less speculation and more relevant data points. 

[Anonymous]

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@red259 wrote:

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@Anonymous wrote:

My main banking is through Capital One, and they do a hard pull for their overdraft protection; at least they did in my case. 

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Thanks, maybe what I will do is contact my bank and ask them then. This is something that pops up everytime I log into my account., because the laws were changed years ago so they can't just put you into overdraft protection without your permission. 

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I guess it really also depends on what type of overdraft protection. For instance, Capital One offers the option to automatically transfer the overage amount from savings, which doesn't incur a hard pull, option for them to pay the overage and charge an overdraft fee (like the traditional way), allow no overages at all, or the option to have them cover overages up to a certain amount (for which they charge a nominal interest fee), with the expectation that your next deposit will repay the overage. It's similar to a checking/personal line of credit, except that it takes your account into the negative for the amount(s) over, and pays off with next deposit. That's the one that requires a hard pull.