How Can I Fix My Credit With Overdraft?

When you write a check, withdrawal funds from an ATM or use a debit card to make a purchase, the company pulls the money from your bank account. If the money isn't there, you are subject to an "overdraft fee." This fee is charged by your financial institution. If you struggle with over drafting your account, it's important to make some changes. Financial institutions track this behavior. Too many offenses and you might end up with a closed checking account. Fortunately, you can take a few steps to protect yourself from overdraft fees and get your credit back on track.

Instructions

1

Pay overdraft fees to bring to account current. If this is the first time you've over drafted an account, the financial institution may waive some of the fees. However, if overdraft is a reoccurring challenge, the financial institution will expect you to pay the fees. Doing this, will bring your account current.

2

Apply for a secured credit card. Some financial institutions will close your account if there is a serious habit of overdraft. In these cases, it's really important to start focusing on rebuilding credit. Apply for a secured credit card to start building a positive history again. Find companies through online comparisons, such as Bankrate.com. Payoff the credit card balance each month.

3

Open an account at a credit union. Credit unions usually make local decisions. This means, a branch manager evaluates your situation to decide if you can have a checking account. After several months of making timely payments on a secured credit card, talk with a credit union manager about your situation. Explain how you've made changes to rebuild credit and avoid overdraft issues.

4

Set up overdraft protection. Ideally, you don't want an overdraft to occur. However, if it happens again in the future, it's important to be prepared. Ask the financial institution about overdraft protection options. For example, some financial institutions offer overdraft protection; pulling money from a savings or credit card in the event of this occurrence.

5

Balance your check book diligently to avoid overdraft issues, recommends the Federal Reserve. Don't forget about automatic payments you set up with organizations, such as insurance or loans.