Does Charging Credit on Your Debit Card Count Towards Your Credit Score?

Your debit card won't have a positive effect on your credit score.

Your debit card won't have a positive effect on your credit score.

For some people, debit cards make a lot more sense than credit cards. They allow you to pay as you go without running up big balances that incur interest. Unfortunately, debit cards are inferior to credit cards in one important respect: they don't report to the credit bureaus. Debit cards can't help you improve your credit score.

You're Not Borrowing

When you charge something on a credit card, the lender fronts you the money for that purchase – you're actually borrowing that sum. You'll receive a statement requiring you to pay back at least a portion of the purchase the next month. When you use your debit card, however, you're using your own money to fund the purchase. The card is attached to your bank account and the purchase deducts from your balance. It's the same as writing a check, or taking cash out of your account and using that. Debit cards are just an easy way to access your own funds. Because no one is lending you the money, there's nothing for your bank to report to the credit agencies and your purchases have no effect on your credit score.

Negative Effects

Because banks don't report debit card activity to credit agencies, using your debit card to the exclusion of credit cards can affect your score in a bad way. If you have no credit history yet, your debit card won't help you build one. Unless you have other loans, your credit history is a blank and potential lenders have nothing to base credit decisions on. If you've already established your credit, and then you decide to use your debit card for a while to save yourself some interest fees, you'll also create a blank period in your credit history. If you use a credit card instead, and if you keep your balance manageable and consistently make your payments on time, you'll begin to look like a pretty good risk to future lenders.

Another Downside

Because the money comes directly out of your bank account when you make a debit card purchase, you lose the use of that money – at least temporarily – in the event of a dispute with the vendor. For example, if someone inadvertently swipes your card twice for the same purchase, you're out the money for the second charge until the matter can be resolved. If you have a problem with a credit card transaction, however, the lender usually acts as the middleman to straighten the problem out for you.


Some financial institutions offer prepaid debit cards. You front the money to the banking institution, and it subtracts your purchases from this balance rather than from your account. This might help you avoid overdraft fees, but it probably won't accomplish much more than that. An alternative is to take out a secured credit card instead, which works on a similar premise. You make a deposit with the lender, but the deposit acts as security for your borrowing and you must pay the purchases off with other funds. If you make timely payments, your deposit is never touched. If you default, the lender will use your deposit to recoup the money it loaned to you. This can be a viable option if you're just starting out and trying to build your credit, because these companies do report to the credit bureaus. If you already have a credit history and a credit card – either secured or traditional – you can balance the effects of using a debit card by charging purchases periodically to keep your credit history active.


About the Author

Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.

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