Discover which banks offer second chance checking below...
What Causes Bank Checking To Be Denied...
Because banking is a highly–regulated industry, an checking accounts for bad credit individuals approved are forced to look to alternative issuers. Once you have a bad history with the Chex Systems you can find getting approved difficult with traditional banks.
The Chex Systems is an organization that maintains records for financial institutions on former or current account holders who have had or are having problems maintaining their account in good standing.
Bounced checks are the most common red flag the Chex Systems records and remembers.
What happens is that when you bounce personal checks at a high frequency or have an account that is overdrawn for an extended period of time, this information will be submitted to the Chex Systems and the possibility of your opening another account will be blocked in the future.
How to get your name off the Chex System? A number of reputable companies are available which can help you clear up your report: See our recommended repair services here.
Typically, the account holder's name will stay on the list regardless of the account settlement period. Being listed with Chex is not the end of the world though, banks needs new customers and second chance credit and deposit accounts are available from specialized banks.
Providers of Bad Credit Bank Accounts
The following companies provide accounts for people with a bad credit. In some cases the bank simply doesn't reference the Chex System or they offers specialized checking:
- Bank of America – Advantage
- JP Morgan Chase – Access
- Wells Fargo – Opportunity
- Citizen Bank – Second Chance
- PNC Bank – Fresh Start
- US Bank – Second Chance
In addition there are a number of state specific local issuers that offer personal savings and bank checking for bad credit. These banks can be found referencing the State you live in and referencing their websites. Digital online banking is also enjoying an increase in popularity and a number include specialized products.
The proliferation of these account types being offered in the financial market is in response to the growing demand caused by the recent economic challenges that have left many people with a bad financial history. Additionally, local credit unions are adapting and offering second chance account options to meet the needs of their customers.
Restoring access to banking has the following benefits and advantages:
- Restore Trust: Managing a household is tough, with a number of bills needing constant attention and access to a bank account provides convenience and access. While bills are being paid via personal check, atm or debit, scores may be improved. Paying your bills in this way, as opposed to using cash, allows you to document responsible financial management. Proper management of your personal finances leads to no bounced checks and other forms of returned payments due to insufficient funds. Penalties which may be charged such as overdraft fees need to be avoided.
- Qualify for Better Products: Bad credit banking can be expected to have fees that are higher than regular bank accounts and they typically are not interest earning. This is the tough break business–side of getting flagged as a high risk. Bankers offset the additional risk with additional costs and less benefits. Make sure to remain compliant with the bank’s policies, to stay in their good graces, and get a better banking product when you have fixed your reputation.
- Lowers Costs: Monthly service fees are applicable and may not be waived or refunded. Banking of this type is simply less flexible than normal. Free is no longer a financial staple when it comes to account maintenance, expect costs. Fees may only be adjusted for these accounts if a bank error is found, though we recommend talking with your representative all the same, it won't hurt and helps build the relationship.
- Buys Time: You usually will have the option for an upgrade to regular banking products after a trial period. With due diligence and proper account management, you can eventually move to a trusted status and get a normal account in time. For most banks, maintaining the account as expected and as stated in the terms and conditions can lead to the upgrade after a pre-determined period. The upgrade can also include your eligibility for a savings or other interest–bearing accounts.
- Increased Flexibility: Expect your accounts to have limitations and not operate exactly as a typical checking account does. For example your bank may not allow you to issue personal check payments, your debit transaction amounts might be limited, and you might have a minimum daily balance maintenance requirement which can be a fixed amount before or after all debit activity. These restrictions vary per issuer, it is important just to be aware and follow the rules.
For further information you can review the FTC's recommendations here: bad credit banking. It is clear that what is created is a relationship of shared responsibility. The bank assumes the risk of the high risk customer, the applicant assumes the responsibility of banking responsibly. Ideally, you are expected not just to meet your responsibilities, but to exceed expectations and rebuild your trust to regain all the benefits trusted status can provide.
Final note of caution: In your search for a flexible account for banking, you may be asked to pay an application processing fee, do not. These fees are illigal and a sure sign that you are not working with a trustworthy, legitimate second chance checking provider.
Bank checking is required for a number of financing options including personal lending offers which can deposit money into your account within hours of your completing the easy 5 minute online application. Check out our favorite financing offers for fast cash today...
"Open the doors of opportunity for you and your family again..."