Bad Credit Loans Guaranteed Approval

I have received quite a few emails lately from readers that need a checking account with bad credit. I realized there is a whole bunch of misinformation out there about second chance bank accounts. The first thing I want to make perfectly clear is your credit score range has absolutely nothing to do with your ability to open a checking account. Now it is possible that what you did to fall into a bad credit score range may be affecting your ability to open a checking account with some banks, but your credit score itself will not prevent you from getting a bank account. It is possible that you may have a bad credit rating with the banks; which is completely separate from your credit score.

Checking Accounts for Bad Credit

If you have been denied a checking account with any of the major banks it is most likely that you have negative remarks in something called ChexSystems. ChexSystems is similar to the credit reporting agencies and must also abide by the Fair Credit Reporting Act which I believe is where most of the confusion comes from when people talk about banks accounts for people with bad credit.

While CS (ChexSystems) does in a way monitor your credit worthiness, it focuses more on how you handle deposit accounts. The reason most people show up as a risk is in CS is because they closed a bank account with a negative balance. This is actually pretty common when people are facing financial hardship, they overdraft and a snowball effect of overdraft fees brings their account into the negative by hundreds of dollars. Often times the negative balance can almost be as much as their next paycheck leaving them unable to pay. This leaves most of us with two choices, a payday loan or just walking away from the account. Most of us are going to go with the second option, not realizing the consequences until we try to open a new bank account when we get off our feet and end up being turned down or denied a bank account. The information stays in ChexSystems for 5 years before it gets removed.

Okay, So I am in ChexSystems, Now What?

No matter what anyone else tells you, you really only have two options (there is a third but success is unlikely).

The first is you wait and let the 5 year mark pass, which is not as crazy of an option as it sound. If you think about it, we really don’t need banks. The are definitely convenient and make life easier, but you can get by without a bank account all together. You are most likely going to have to pay a small fee every time you cash your paycheck, but depending on how much you make this can be cheaper that the monthly fees that come from opening a second chance checking account. You will also need to address the problem of where to keep the money, which would most likely mean you will be buying a small safe or renting a safe deposit box from the bank. Yes you can rent a safe deposit box even with terrible credit.

The second option is you start looking for banks accounts for bad credit – that is banks that do not use ChexSystems -  and try to open a new account there. You may need to look into online banking as brick and mortar banks usually check the credit rating of applicants wishing to to open a new account. Finding a physical bank that offers second chance banking is going to be difficult as over 95% of banks in the US all use ChexSystems.Most online banks that offer 2nd chance banking (like BBVA Compass) will charge you a fee to open the account and a monthly fee for maintaining your account. This is the option most people go for, but it has its cons along with the pros. You must have an employer who offers direct deposit, and in addition to the monthly fees, you will have to pay a fee every time you withdraw from an ATM. Even with the fees, your best option may be to open a second chance checking account online.

The third option is you can actually dispute the information contained in your file by ChexSystems. First you need to know what you are disputing so you will need to request a copy of your report. Once you have had time to go over the report you can being the process of disputing what is contained in your file. Most people have very little success with this, but it is definitely worth it if you believe the information is erroneous.

Banks That Offer Second Chance Checking Accounts

Note: This list is rather small but will be updated monthly, please use our contact form to address and errors or request additions. Links will take you to the banks website.

• BBVA Compass
• Armed Forces Bank
• ING Direct