I'm considering opening a line of credit. The main purpose of this LOC would be to cover myself if I overdraw my checking account (I do this occasionally, and pay pretty steep fees every time). With a LOC, I would only pay interest on the overdrawn amount.

I know that this will impact my credit score as a new credit account. Are there any other things I should think of before opening up this LOC?

  • 3
    Wouldn't it be better to consider why you are repeatedly overdrawing your checking account, and find a solution for that?
    – user
    May 20, 2013 at 9:32

1 Answer 1


It will either appear as a new revolving account or not appear at all until you use it. The main impact will likely be the initial hard-pull when you apply, and it will wear off in several months.

  • Hard pull impacts report for 12 months. (Per Credit Karma) May 20, 2013 at 2:37
  • Would there be a fee to set up a LOC, plus it would be treated more as a business account and would charge for almost everything like getting a statement, etc
    – Dheer
    May 20, 2013 at 3:09
  • @Dheer are you asking me? How would I know? In my bank its just a "credit limit" on the checking account, there's no additional statements. I have no idea what exactly it is that the OP is talking about.
    – littleadv
    May 20, 2013 at 4:52
  • 1
    @littleadv Just thinking loud, as the OP is in US, typically whethere opening and maintaining a Line of Credit would cost. For example in India, to open a Line of Credit there is a initial cost and yearly costs. If so this should also be a consideration cost / benefit apart from the credit score.
    – Dheer
    May 20, 2013 at 5:40

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