How to Open a Bank Account with Bad Credit

Having a checking account is pretty much a normal requirement in life right now so if you're struggling to get one due to unlucky credit here's a few tips. There are banks out there that will let you open without a credit check if you know where to find them. But first lets cover a bit about how banks do check for credit as its always better understanding what is really going on

How Your Credit is Evaluated
Just like credit card companies the banks also look at your credit history before allowing you to use their services. They do this to minimize their risk.

What is a credit score?
There are many ways the banks can review your credit scores and history, but a common way is to run your credit through the 3 bureaus: Equifax, Transunion & Experian. This number shows how much of a risk you are to them. This risk is purely financial of course, but the lower your score the higher the risk that they will have problems with you. In simplistic terms if you always pay your bills every single time you scores will be higher as you've shown to be disciplined with money. Now that of course excludes bad luck such as getting disabled or identify theft, but in general terms to the bank the higher your score the better you are with money.

ChexSystems is another agency that the banks can use. ChexSystems shows any bad checks, overdrafts and account freezes you might have. If you have this you have a few options:

  • The first obvoius fix is to to fix the issue. If you're regularly issuing bad checks you're going to need to stop.
  • You can also ask the bank to reconsider your application and ignore these issues

Banks without credit checks
Not all banks require credit checks or even a deposit. In fact there are some excellent banks out there that understand that sometimes people need a helping hand to get back up.

They don't run credit checks, use ChexSystems or even require deposits. Banks such as Chime do not require credit checks, but you can find more simply by searching online.

We understand that sometimes its simply bad luck when someone has bad credit, but there are also a lot of cases where it is not. If you have never paid your bills on time, carried large balances on your credit card and such you have to accept that your bad credit scores are in a large part your own fault. The good news is that there is so much great information out there to help you fix your money habits. When you fix your money habits you will gradually fix your credit.

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