Second Chance Checking Accounts
People who have been denied a checking account may still qualify for second chance checking accounts. Even though they have been turned down at some places, there are other banks that offer second chance banking.
Second Chance Checking Accounts - What They Are
Second chance checking accounts are checking accounts made available to people may not qualify for a regular checking account. This is usually a result of a negative record on their account profile with a consumer reporting agency like ChexSystem or Telecheck. (Since the most prevalent system used is ChexSystems, we will use that as the main example here.)
ChexSystems works lke a credit bureau like Experian or TransUnion, except that its maintains data specific to checking accounts. For example, if you have a closed a checking account owing overdraft balances or unpaid fees and that event is reported to Chex Systems, it would show up under your name in the ChexSystems database.
With this record, if you go to another bank that is a member of Chex Systems and try to open up a checking account with them, they will see your negative record. The bank may then deny you a regular checking account according to their policies. However, you could still be approved for a second chance checking account by the same bank or another bank or financial institution.
Second Chance Checking Accounts - Moving On And Rebuilding Your Finances
It may be sad that this happened, but whatever the circumstances that led to this situation, it is now time to forge ahead to a better financial future. Second chance checking accounts can give us a fresh start at building our credit history and pave the way to being upgraded to a regular checking account with better terms and conditions.
ChexSystems records last 5 years, but we may not have to wait that long for our checking and credit history to clear up. For one thing, a good second chance checking account will allow us to start participating in mainstream financial activities and easily make payments on our financial obligations, just like anyone with a regular checking account. By demonstrating a good record to meeting you financial commitments, it helps you to establish good credit history.
Once your feet is on more solid ground financially, you may want to ahead and work with the bank with the original problem checking account to resolve the situation and request for them to update your profile at ChexSystems. If your negative standing is still not removed, or your Chex systems record account not updated to reflect the payments and other positive actions you have taken, you can also file a dispute with ChexSystems to update your account profile.
Opening A 2nd Chance Checking Account
While not all banks are open to offering second chance bank accounts, some are. These banks may still be members of ChexSystems, but they have internal policies that allow them to give people who come to them a second chance.
One example is Chase bank. If you apply for a checking account with them, they may come back to you and let you know that you did not qualify for a regular Chase checking account, but you are qualified for a Chase Access Checking account. Some financial institions will go further to ask for you to qualify for the account by taking a short financial education course or quiz.
Besides nationwide banks, consider also smaller regional banks or credit unions. There is no specific category of banking for second chance banking institutions, non chexsystems checking accounts and second chance credit unions, they are all regular financial institutions. These banks or credit unions could be using the Chex system but they do not solely base their decision of whether or not to offer a checking or savings account on Chex systems data and records.
Many bank branches are willing to work with good people on case-by-case basis and if you can demonstrate the qualities they are value, the branch managers could well be willing to approve your account. For example, if you have a job with a regular paycheck and agree to set up direct deposit with the bank, that could be a circumstance in your favor.
One important tip - if you already know that you have a record on the ChexSystem, it is best to be upfront abut it. You can enquire with the bank representatives about their policies on opening checking accounts in this situation. Sweeping this under the carpet can be a waste of time. Some banks are known to have closed out accounts in the first few days once they find out that the applicant has a record on the ChexSystem.
Welcome To Second Chance Banking
To summarize, if your name is currently in the ChexSystems and you have been denied a checking account, there is very good chance that you will find other banks that are willing to offer you a second chance checking account. If you have been turned down by several banks, all that means is that you have not found the right banks yet. Don't be discouraged.
Many who have been denied a checking account application are able to successful open up second chance checking accounts, whether through an online bank or local bank or credit union. Banks like ING Direct, Chase or US Bank can potentially help. For more ideas on where to start, check out the second chance checking banks article and other banking websites. You will likely be able to find more than one offer for a second chance checking account for you. When that happens, don't settle for the first offer. Check out the terms and conditions to pick the one that offers you the best terms and match for your needs.