Bank aren't just running your credit when you want to open up a credit card, but regular checking accounts too.
If you're someone with bad financial history, or no history at all, opening a new checking or savings account won't be an easy task. According to CNN money, about 15% of all applicants are denied accounts due to a bad banking past. Just because you've made some mistakes in the past, doesn't mean you'll never have that banking experience again, and all your transactions will be done in cash.
Here are five alternatives to getting a "checking account", when you don't a have a perfect credit report:
Prepaid debit cards. When it comes to prepaid cards, the fees associated with them can be sky high. While you definitely can get some of the same benefits as a checking account, like direct deposit, it's important to do your research and make sure it's the best card for you.
Secure credit cards. Secured credit cards can actually get you a checking account in the future. With any alternative like this to a standard checking account, the risk for companies is greater. That being said, the interest rates will be high and the credit limit can be low, but this will be a good way to rebuild your credit if you are good about not carrying a balance.
Banks that don't use ChexSystems. Another thing that can certainly help you get the banking experience you're looking for is to not use banks that run reports on your history at all. ChexSystems is a reporting agency that holds alll of the information on your checking and savings accounts, similar to what Equifax does for credit reporting. If you're denied an account from one bank, you may be eligible at banks that don't use ChexSystems at all.
- TD Ameritrade
- Axiom Bank
- Woodforest National Bank
- United Bank
- Southwest Financial Federal Credit Union
- Wells Fargo Opportunity Checking
- PNC Foundation Checking
Second chance accounts. Banks that still use ChexSystems are also offering customers a second chance through these accounts. You might be required to take a money management class to get one but it will be worth it if you are trying to rebuild your credibility. The only downside is there will be higher maintenance fees and you might need a larger initial deposit to open it.
Alternative checking accounts. Alternative checking accounts are now being used to reach those who are undeserved by banks by offering these types of checking accounts. They are offered by American Express and Walmart and even have features such as direct deposit, online bill pay and you can even write checks.
Have you ever been denied from opening an account with a bank?