Bad certified check won’t damage credit

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Dear Dr. Don,
My online employer promised to issue me a certified check. However, I’ve been hearing stories about counterfeit certified checks. What exactly is a certified check? How does one know if a check is a counterfeit? If a check is a counterfeit and I deposit it, what problems does it pose for my credit?
— Rita Reconnaissance

Dear Rita,
I wrote one of those stories in an earlier column, “You can’t always trust certified checks.” I’d hate to think your online employer would issue you a counterfeit certified check to pay you for your work. If this is a continuing relationship, you could suggest direct deposit as an alternative method of payment.

You won’t know if the check is counterfeit until it has been deposited. If the check clears, it’s good. If it doesn’t, the money will be taken from your account. It becomes a problem because a certified check can have next-day funds availability in your account, but your bank may not know by the next day if the check is counterfeit. So funds availability won’t match up with the check clearing through the banking system.

If you spend the funds from a counterfeit check, you’ll have to repay the bank. This problem is described in greater depth in the Federal Trade Commission’s Facts for Consumers publication “Giving the Bounce to Counterfeit Check Scams.” It doesn’t do anything to your credit because your banking transaction history isn’t part of your credit report.

A certified check means just that — an officer of the bank has certified on the check that good funds were available in the amount of the check at the time the check was originated and that the signature on the check is genuine. The bank then sets aside the funds and will use only these funds to pay the certified check.

If the check isn’t forged, you won’t have an issue depositing good funds into your account.

Read more Dr. Don columns for additional personal finance advice.