Checking accounts for less than perfect credit
There is a difference between credit and checking accounts for less than perfect credit. With a credit account you use money that is not yours and you can repay it back with interest every month – you can use credit cards to access that money. The checking account is a savings account where you keep your money and you can access it either by writing a check or by using a debit card.
Should we hold responsible checking accounts for less than perfect credit ratings? In some cases they can be responsible for lowering your credit score – for example, when you have a bounced check. Unlike before, with the help of modern technology, today checks can get cleared within a few hours. Stores are allowed to make electronic copies of your check and transfer them through computers, instead of waiting until the end of the day when checks are physically transported.
Let’s say that you just opened a checking account. You decide to deposit $2,500 in it. The same day you go shopping and you find the coolest 3rd+ generation night vision goggles on sale for $2,000. You write a check, but guess what? The check gets bounced because the money isn’t in your account yet. Clearing a check takes less time than getting your deposited money in your checking account. The credit bureaus are notified of this incident, and unfortunately it can pull your credit score down for a very long time. This is the only time that you can blame your checking accounts for less than perfect credit.
A checking account can’t raise your credit score because you are not borrowing money when you are writing checks. You are spending your own. You don’t need a credit score to get approved for a checking account. Although some employers will ask for your credit score before they hire you, the only time you will need it is when you are trying to get a loan.