Need your help fellows

7 replies
Hi,


Need your help fellows. Do banks report information about bounced business checks to the credit bureau?
#fellows
  • Profile picture of the author rudi
    No they will not affect your credit score with the major credit scorers. However they might adversely affect the amount of credit you can get from your current bank if checks are often bounced.
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  • Profile picture of the author Jason Kanigan
    I was a credit manager for a national electrical wholesaler for 4 years. If you/your business bounces a check, it's reported as a "financial embarrassment" line item. When you see a string of them on the report, you know the business is in trouble.

    If it was a one-time thing not in the immediate past, I wouldn't worry about it so much. But if it happened recently and the person was angling for credit, I'd be asking the uncomfortable question about their cash flow. If there was a cluster of them recently I would not provide credit.
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    • Profile picture of the author iAmNameLess
      Originally Posted by Jason Kanigan View Post

      I was a credit manager for a national electrical wholesaler for 4 years. If you/your business bounces a check, it's reported as a "financial embarrassment" line item. When you see a string of them on the report, you know the business is in trouble.

      If it was a one-time thing not in the immediate past, I wouldn't worry about it so much. But if it happened recently and the person was angling for credit, I'd be asking the uncomfortable question about their cash flow. If there was a cluster of them recently I would not provide credit.
      How long ago was this? Right now, a bank cannot report a bounced check unless the account was closed and the fee was unpaid. That's at least how it is right now.... unless you guys required a statement history of 6 months or however long before giving net XX terms.

      There's another issue here.... What credit bureau? If you're a business, then you should be establishing different credit under your EIN. Personal credit shouldn't be a factor regardless, unless you're just a DBA. Usually people will pull your duns, but that's about it.
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  • Profile picture of the author asteven
    thanks guys for your valuable replies.
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  • Profile picture of the author asteven
    Hi All,

    I have one more question guys.
    Is business checking account really better than my personal checking account? What are the benefits which I should expect?
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    • Profile picture of the author JKirby
      Originally Posted by asteven View Post

      Hi All,

      I have one more question guys.
      Is business checking account really better than my personal checking account? What are the benefits which I should expect?
      Short answer: Nope. It's about the same.

      HOWEVER, if you're conducting business and personal life within a single checking account, you're NOT running a legitimate business. You're running a hobby. The separate of the two accounts is your first step to realizing that the business is it's own entity and should be treated as such.
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      • Profile picture of the author asteven
        Originally Posted by JKirby View Post

        Short answer: Nope. It's about the same.

        HOWEVER, if you're conducting business and personal life within a single checking account, you're NOT running a legitimate business. You're running a hobby. The separate of the two accounts is your first step to realizing that the business is it's own entity and should be treated as such.
        Thanks JKirby,
        Your point is right.
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