topic Re: Using over draft LOC good or bad for score? in Understanding FICO® Scoring

Using over draft LOC good or bad for score?

Anonymous — Mon, 18 Jun 2007 22:46:11 GMT

Hello. New type of question.
Checking account over draft line of credit.

I was planning on using it regularly and paying it back like a credit card. Not having it but actually using it.

(thinking people who over draft a lot might look like they can not handle their check books)

Using over draft good or bad for score?

Thanks in advanced!

Message Edited by ilovepizza on 06-18-2007 03:46 PM

Re: Using over draft LOC good or bad for score?

fused — Mon, 18 Jun 2007 23:32:19 GMT

ilovepizza wrote:
Hello. New type of question.
Checking account over draft line of credit.

I was planning on using it regularly and paying it back like a credit card. Not having it but actually using it.

(thinking people who over draft a lot might look like they can not handle their check books)

Using over draft good or bad for score?

Thanks in advanced!

Message Edited by ilovepizza on 06-18-2007 03:46 PM

Just like any TL, good if no are derogs are reporting with it. What is interesting is how differently the CRA's categorize this this type of account . On my wife's three reports: EQ reports this account as a "revolving account with a line of credit," TU as "deposit related account with overdraft protection or reserve checking account" and EX as an "installment account with an unknown credit extension - review or collection."

IMO, I think EQ has it correct. Overdraft protection is a line of credit, albeit it small, and in most situations is revolving. EX, not sure where they are coming from. Good thing her TL has not been treated as collection, her score is 781.

Re: Using over draft LOC good or bad for score?

Anonymous — Tue, 19 Jun 2007 09:49:13 GMT

@Anonymous wrote:
Hello. New type of question.
Checking account over draft line of credit.

I was planning on using it regularly and paying it back like a credit card. Not having it but actually using it.

(thinking people who over draft a lot might look like they can not handle their check books)

Using over draft good or bad for score?

Thanks in advanced!

Message Edited by ilovepizza on 06-18-2007 03:46 PM

Sounds like playing with fire to me...not to mention it looks bad on your bank's own internal scoring system, no doubt. Could come back to bite you if you apply for a bank credit card or mortgage.

It's too easy to get CCs if you really need another TL that badly.

Re: Using over draft LOC good or bad for score?

Anonymous — Tue, 19 Jun 2007 15:37:11 GMT

I guess I can add it, if score drops from usage and does not bounce back, I can have the whole trade line removed. Just wondering if anyone knew so I didn't have to test it to find out.