What might happen if a consumer frequently overdrafts their accounts?

Frequent overdrafting of accounts can lead to account closures as financial institutions may view this behavior as a risk. When a consumer consistently overdrafts, banks might see it as an inability to manage finances responsibly. In response, they may choose to close the account to limit their own exposure to potential losses or risks associated with the consumer's financial behavior. Additionally, account closures can also have broader consequences for the consumer, such as loss of access to banking services and difficulties in establishing relationships with other financial institutions.

The other options do not accurately reflect the consequences of frequent overdrafts. For instance, overdrafts do not generally lead to an improved credit score since they don't demonstrate responsible credit behavior. Similarly, frequent overdraft occurrences typically do not guarantee credit approval; instead, they can hinder one's ability to qualify for credit in the future. Lastly, while some banks report account closure behavior to credit bureaus, frequent overdrafts alone do not have a direct effect on creditworthiness unless they lead to negative outcomes like account collections or charge-offs.