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Bad Credit Checking Account - Tips On Opening A Checking Account With Bad Credit

A bad credit checking account is always available to anyone looking to open a checking account with a less than stellar credit history. To help prepare our readers, we will go over some background information and actionable tips on how to obtain these checking accounts for bad credit.

There are all types of problems that can force you to get a bad credit checking account. Filing for bankruptcy is certainly one of them, and doing so can affect you for 7 years or so. Others are forced to look for these accounts because they have unpaid fees at past banks or have issues with a low credit score. Here are a few tips on getting checking accounts for bad credit.

Bad Credit Checking Account - Background Info

One of the main things that you need to be concerned about if looking for checking accounts for bad credit is the ChexSystem. In much the same manner that organizations check with a credit monitoring agency for your credit score, banks check with ChexSystems or similar agencies for your history as far as banking is concerned.

If banks find negative information about you in ChexSystem's files, then they may have reason not to take the risk of approving you for a new checking account account. However, not all banks check with ChexSystems or similar agencies.

When banks give you a checking account with bad credit, they will view you as a higher risk. Therefore, you will typically be required to make a higher initial deposit or maintain a higher account balance on a daily basis. Most banks will also charge you a monthly maintenance fee.

The amount of money that you're charged to keep your bad credit checking account will vary between institutions. That's one of the things that you need to make note of over the course of researching second chance bank accounts.

Whether it is a bad credit personal checking account or a business account account you need, the same fundamental concepts apply. When opening personal accounts, banks will look into your personal ChexSystems history under your social security number. When opening a bad credit business bank account, you can expect the bank to use the EIN or TIN to run a check, rather than your personal SSN.

 

 

Find Non-ChexSystems Banks

You will need to do some research to find which banks will not make use of the system. Even a few that do will offer you an account if the problems at your past bank weren't significant. If you still only owe a small fee to a past bank, then another one may be willing to give you a chance.

Sometimes, if you landed on the ChexSystems list because of a serious problem like fraud, then it becomes much more serious to be granted an approval. That said, it is certainly not impossible. There are a minority of banks that are do not use the ChexSystems records at all as a yardstick when granting account approvals. Currently, they number less than a fifth of all banking institutions.

Find Banks With Second Chance Checking Account Programs

Some banks will also run Second Chance Checking account programs along their regular checking programs. These second chance bank account programs specially meant to offer account approvals to applicants who have been denied regular checking accounts. Besides Second Chance Checking, these programs come in various names like New Opportunity Checking, Special Access Checking, Fresh Opportunity or Fresh Start Checking.

These accounts have a few more restrictions or higher fees compared to the bank's regular programs. However, with time and monitoring to account history, many banks are willing to upgrade account holders of their second chance accounts to full regular checking account holders.

Apply For A Bad Credit Checking Account With Care

It is best that you not keep trying your luck running through all banks around town and getting denied. Every time that an inquiry is made, it will affect your ChexSystems listing. If you have too many over a short period of time, then your account may get flagged, further reducing your ability to get a good checking account. So make sure you do your initial research first online and calling on a bank's customer support to understand their policies and programs before actually applying.

Besides Banks, Consider Credit Unions And Brokerage Houses

You don't simply have to look for banks to give you a bad credit checking account. Credit unions are a great alternative. Some credit unions adhere to a policy of not turning anyone down for a bank account if they qualify for the credit union's membership. Besides banks and credit unions, you can even get a checking account with a brokerage house.

Don't forget to check out good online banks that are FDIC members, as some will offer convenient online accounts without credit or other checks. These online account often come with little or no account maintanence fees, bad credit or not.

ChexSystems Flags Expire After 5 Years & Some Banks Take Into Account Only More Recent Violations

When trying to get a checking account with bad credit, you need to take time into account. Nothing lasts forever, your data will only stay with ChexSystems for so long. Usually it's no more than five years. Also, not all banks or financial institutions will check back that far. For example, some banks check back only to the last 3 years.

So, if your problems happened before that, you may not have much to worry about. Before submitting an application, you can always check with a supervisor what the bank's policies may be regarding ChexSystems records.

If your record isn't nice and shiny, you can still qualify for bad credit checking account. There are always second chances, even when dealing with banks. Keep in mind the above tips. The various fees and restrictions that you will be subjected to will vary, so pay attention to them as you research through various banks on the internet.

As an alternative to a conventional checking account, consider a prepaid Visa card account with no ChexSystems requirements. It works just like a checking account, allowing for direct deposit of paychecks and online billpay (one-time or recurring payments). You can deposit cash into the account from 135,000 retail locations nationwide. In addition, the card can be used anywhere Visa is accepted. Click to learn more: The Perfect Alternative to a Checking Account!

 

The perfect alternative to a checking account