In most cases, a retuned deposit item will not affect an individual’s credit score or credit rating.  A check from someone else that has been deposited and then bounces is referred to as returned deposit item.  Once a deposit is returned or bounces, the funds are taken out of your account.  For account holders that have a surplus of money in their checking account, the only inconvenience will be the bank fee charged for the returned item and the costs associated with collecting from the person or party that sent the check that was returned

If the returned deposit item results in your checking account becoming overdrawn, the bank will expect you, the account holder, to cover the overdraft amount.  It is also possible that the subsequent negative balance may result in checks that you sent from your account to bounce or be returned.

If the checks sent from your account no longer have sufficient funds to cover them due to the returned deposit and bounce, the recipient of these checks may report any delinquent account activity to a credit reporting company.  This will generally only happen if the payment being made is not covered by a new payment in a timely fashion and the payment makes the account delinquent.  An example may be a credit card payment that bounces because your account is overdrawn after a check you deposited from someone else is returned and the monthly is now delinquent because of your bounced check.

In addition, if the bank is not made whole in a timely fashion because your account is overdrawn due to the retuned check you deposited from someone else, they may report the incident to the specialty credit reporting companies used in the banking industry.

The domino effect that can result from a retuned deposit item can also be ameliorated if the account holder making the deposit has overdraft protection through their bank.  While this does not stop the bank from charging fees or help collect the money on the returned deposit, it does lessen the costs that can result from checks written that would have bounced due to insufficient funds caused by the returned deposit but are now covered by the overdraft coverage provided by the bank.

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