There are few things as frustrating as going into a bank branch to open a checking account, only to be told that you’re not eligible for a new account because of blemishes on your credit report or because of your name being listed on a Chexsystems report. With the economy being in bad shape, lots of people have taken serious hits when it comes to their finances, and the number of people whose credit has deteriorated has increased dramatically. So now what you get is a lot of people looking for banks that don’t rely on your credit rating to allow you to open an account. Bank accounts with looser requirements are necessary because not only do you need them from a convenience standpoint to do your regular financial transactions, but you also need an account so that you can get your finances back on track because relying on check cashing services to do all your financial transactions is a very expensive option.

Second chance checking accounts

This is where second chance checking accounts come in. If we’re (brutally) honest, we have to tell you that your options will be limited, because as weird as it may sound, financial institutions are not very risk-prone. What you’re looking for is a bank that will offer you a checking account with standard features, but that will be willing to overlook your bad credit. Checking accounts for people with bad credit are not a different product per se: behind the scenes, they work in exactly the same manner. The only difference is that because you’re considered a “higher risk”, you will pay higher fees and service charges compared to people who have “regular” checking accounts.

To open the account, the requirements are minimal (the hardest part is actually finding a bank that doesn’t check credit): have a government-issued ID and a valid Social Security number. This is required because of fraud verification, and also to make sure that the financial institution complies with FINCEN, which is a set of financial requirements to combat terrorism financing and money laundering.

Advantages and features of second chance bank accounts

Like we said previously, second chance checking accounts work the same way a regular bank account does. You will get standard features such as direct deposit, online banking, online bill pay, Visa or Mastercard debit card, ATM transactions, and so on. As for the restrictions, there’s a good chance you will have limited check writing privileges (if at all), and you will certainly not be allowed overdrafts. But considering how those overdraft fees can quickly pile up, we’re not sure that’s a bad thing.

Even though such accounts do come with their drawbacks, they are viable options as long as you remember what got you in trouble in the first place and do your best to manage them well and qualify for the “regular” accounts as fast as possible. Consider the fees as you paying back your way into the good graces of the financial system. In any case, it beats carrying cash everywhere (which is really not safe). Banks that don’t check credit provide a good solution to people looking to get their financial house back in order.

Banks That Don’t Check Credit To Open New Accounts | Second Chance Checking Accounts

The ReadyDebit card is a prepaid debit card. When you apply for your Ready Debit card you can enjoy most of the same features of having a regular checking account. We don’t think there’s really a need to go in depth about how prepaid debit cards work: you use various methods to load money on to them; once that is done, you can use the card until you run out of money. Since the card is designed so that you can’t spend more money than is on the card you have to reload it if you want to keep using it. That’s it, in a nutshell.

So why pick this prepaid debit card over another one? Well it’s going to hinge on three factors: convenience (how easy is it to get the card and put money on it), features (what does the card actually allow you to do) and fees (how much do you get charged). You want to find the easiest to get prepaid debit card that offers the most convenience and features at the lowest fees. In most cases, you’re going to have to compromise. So how does the ReadyDebit prepaid card fare in each of those categories?

Related post: BBVA Compass SafeSpend Debit Card Review

Convenience

• The READYdebit™ Card is a debit card that is designed for people who have very poor credit and/or can’t open a bank account. There is automatic acceptance for everyone who applies and can verify the information they provide because it is a prepaid card and no credit lines are extended. Ready Debit does not require any kind of credit check.
• The READY Debit card offers much of the convenience that credit cards offer: the card is honored anywhere that Visa cards are accepted.
• It allows you the freedom to shop and pay bills online, as long as you have the money available on your card. You can shop as much as you want within your account balance with no limit online or at stores, anywhere debit Visa is accepted.
• You have access to your cash at millions of ATMs worldwide
• You’re covered by the Visa Card Zero Liability protection plan: carrying your card is safer than carrying cash and even in case of theft or loss, the Visa Card zero liability coverage protects unauthorized usage of your card.

Features

• You have the ability to load the card at more than 50,000 retail locations using Greendot MoneyPak or Visa ReadyLink. Be advised that there may be a service charge attached to loading your card via these methods.
• Free Direct Deposit. You can get your paycheck directly deposited and those funds will be available to you faster than most banks or check cashing locations. You can access your money up to two days faster with direct deposit by depositing your pay check directly into your account.
• Other Free reload options: Retail Cash Load and Bank ACH Transfer are free.
• The funds in the account are fully FDIC-insured
• FREE online bill paying feature, mobile banking, and online bill paying. You can now pay your bills online for free instead of paying to get money orders or going to the location to pay in cash. This is a much better way to take care of the utility bills.
• FREE online check writing. If the company does not accept electronic check, you can print your own check and mail it to them.
• FREE credit score tracker to help you monitor your credit profile. The card has a credit builder option: when you sign up for online bill pay, you can work on rebuilding your credit score. On-time payments are reported to PRBC to help re-establish and re-build your credit through responsible and regular use of the card. PBRC has yet to gain mainstream acceptance, though.
• No overdraft fees

Fees

The Ready Debit Card comes in three versions – the “Control”, the “Select”, and the “Platinum” versions. Here’s the fee schedule (as of Aug 4th, 2011)

Fees		Control			Select		Platinum
Card issuance		$9.95			$9.95		$9.95		This is a one-time fee, and is not charged until you make your first deposit.
Monthly service		Free with at least $1500 in monthly Direct Deposit, otherwise $3.95			$9.95		$14.95		A great deal—and a whole lot better than check-cashing fees, wire-transfer fees, interest payments, late fees, …Your first monthly fee is charged one month from the day you order your card.
Secondary Card		Not Available			$10		Free		Two cards can access the same account by adding a secondary card. Call 866.465.1645 to set this up.
Signature transactions		$0.95			Free		Free		Other companies charge $1 or more per transaction
PIN transactions		$0.95			Free		Free		Other companies charge $1 or more per transaction
Negative Balance Fee		Free			Free		Free		Really!
Direct deposit		Free			Free		Free		Save time and money-sign up for free direct deposit to your READYdebit card account.
Loading cash & deposits via bank ACH transfer		Free			Free		Free		You can load cash to your card with Visa ReadyLink and Green Dot MoneyPaks. Each store charges a fee to complete the transaction.
ATM withdrawal		$2.25			$2.25		$2		Remember that the ATM owner may charge a fee, as well. Be careful with these—they can add up. Many stores will offer cash back when you make a purchase-buy a pack of gum and skip the ATM fees.
ATM withdrawal decline		$1.95			None		None		Check your balance online before making the request.
U.S. ATM Balance Inquiry		$0.50			Free		Free		Check your balance often-it’s an important part of good money management.
Online customer service		Free			Free		Free
Automated phone support		Free			Free		Free		Check out our FAQ for answers to many questions.
Live customer service		$2 per call		1 free call per month, then $2 each			Free
Online bill pay		Free			Free		Free		A great way to pay your utility bills, rent or even your babysitter.
Bank teller cash advance		$5			$5		$5		Save a few bucks and use an ATM instead.

Summary

The ReadyDebit Visa reloadable prepaid card is ideal if you have been turned down for a traditional checking account (usually by getting reported to Chexsystems) and wish to take advantage of features afforded to checking account customers. It offers an affordable checking-account alternative for people with bad credit who either are non-banked or have a checking account with frequent overdraft fees that are costing them hundreds dollars in fees each year.

Ready Debit allows benefits you with free online payment, free online cheque writing, and access to over a million ATMs. The card offers flexibility in terms of maximum deposits and fees charged. When cardholders use prepaid Visa to pay their bills online they automatically earn positive credit to their account. When bills are paid on time online, it gets automatically reported to PRBC which allows you get a lower rate of interest if you applying for loans later in life.

However, bear in mind that having a prepaid card does not help you rebuild your credit. As previously mentioned, PBRC (while not a scam) has yet to get known to the point where it can be a major player. So the credit-building benefit of the card is rather limited. If you need to rebuild your credit, then a better and more efficient path is to get a secured credit card, also known as a second chance credit card.

ReadyDebit Card Review | Prepaid Visa Debit Cards

Are you in the market to purchase a new laptop but don’t have a good credit score? The problem with bad credit is that it hurts your purchasing power. So if you don’t have the cash ready, your best bet is to find out how to buy a laptop with bad credit. Contrary to what many people think, several options are available for laptop customers who have poor credit or even no credit at all and they include financing without a credit check. You just have to learn what those options are so that you are well informed when comparison shopping.

Related: How to buy a car with bad credit

We wouldn’t feel right if we didn’t disclose that there are drawbacks when you opt for this type of financing. People might tell you that the biggest downside is that the amount of financing will be limited, but that’s really not the case. The biggest downside is that bad credit financing is very expensive. It is not uncommon for people to end up paying twice or three times the retail value of the purchased item. This is why you have to do this with a clear picture of what you should expect.

1. Check with your current employer to see if they have any options to help you buy a laptop. They might have deals in place with their current supplier that would let you buy a laptop almost at cost. If not, maybe they can set up some type of payment plan where they automatically withhold a preset amount to pay for your purchase. This would be the closest thing you’d get to “normal” financing, since in many cases you might not even be charged interest.
2. Check out in-store credit card options. Talk with the store or company that you are looking to buy the laptop from: even if you have bad credit, there are quite a few merchants that will give you a credit card to help you buy the laptop. Most of these types of businesses have in-house financing to help people purchase their laptops. If you don’t want to go with a retailer like Best Buy, you can also get a secured credit card from a variety of credit unions and banks. There are also several other stores and places that do this including Wal-Mart, Dell, Toshiba, Lenovo, HP, as well as Apple. Keep in mind that these stores don’t exactly offer the best financing terms and will charge you a high interest rate. The credit issued will not be an internationally accepted credit card, but rather a credit for purchases in the retail store. The approval rate is higher, but the interest rate for this credit is substantially higher.
3. Rent-to-own retailers offer merchandise to customers with bad credit. You will need to go into one of the rent-to-own retailers and see what type of laptops they offer. Once you decide which laptop you want to bring home, you will need to fill out an application and show proof of your income. Make the required down payment and take your new laptop home.
4. Personal Loans from credit unions or banks. Bad credit doesn’t stop you from going to you local credit union and getting a small personal loan. Many financial institutions offer loans to people seeking a new laptop computer. You must show that you’re able to pay back the loan. Even with a bad credit rating, you might be approved for a small loan if you can prove that you’re more than able to make the payments every month. They will look at your credit score and credit history, and then compare your payments to your current income. If your debt payments (rent included) is under a certain percentage of your total income, you might qualify for the loan.
5. Laptop Layaway. You do have an option to get a laptop with a layaway program too.  While definitely not a fast solution, it’s definitely a smart option if you have poor money management skills.  How a layaway program would work for you is a retailer sets aside the product that you’re interested in while you’re making payments on it.  Until you’re done paying, you cannot take or use the laptop, but once the the item is paid for, it’s yours to do as you please. This is not financial decision since you avoid paying interest on your purchase.
6. Buy a laptop through a computer club. Search the Internet for computer clubs. You can find several of these computer clubs that have a good reputation online and finance laptops and computers to those with bad credit. Many computer clubs do not check your credit, but you will be required to have some type of income or job in order to be approved for financing. Have your paycheck stub available for faster approval. Compare the clubs and choose the computer club that meets your needs.

If you’re in a hurry to get a new laptop and you have terrible credit, you may feel like your options are limited but they’re not: there are many different types of payment plans you can choose from to get a new computer, but unfortunately, in most cases the cost of the financing is pretty high. It thus becomes very important that you compare financing terms and other terms of service and shop around for at least a week before going with any offer.

How To Buy A Laptop With Bad Credit | Poor Credit Laptop Financing | No Credit Check Computer Financing

A bankruptcy is, by all accounts, a traumatic experience: in most cases you lose a good chunk of your assets, your credit is ruined, and it stays on your report for the next ten years. But that doesn’t mean that you can’t rebuild your financial credibility. After all, companies do it all the time. You just have to be in the right mindset, and look in the right places for resources that are available to you

Fresh Start Checking Accounts

Once you have come out of bankruptcy, you will be able to open new bank accounts. Actually, this is the first thing you should be doing, since as a standard procedure, your bank accounts will be closed when you file for bankruptcy. Once the bankruptcy has been filed and a person’s debts have been charged off, you need to immediately starting to rebuild your credit. A bank account is going to be the first thing you need.

Bank Account After Bankruptcy

The first thing that we want to point out to those asking “can I get a bank account after bankruptcy” is this: a checking account has nothing to do with a bankruptcy unless when you filed for bankruptcy, you included some current bank account you had. When you do this, the bank will place an inquiry on ChexSystems and that is what banks use to determine if they will grant you a bank account at their branch.

Related: Repair your credit after filing for bankruptcy

Now if you have included one or more bank accounts in your filing, don’t despair. Getting a new bank account after bankruptcy is not the easiest thing to do, but it is not impossible if you have a plan. Here’s how you should go about it.

1. Look for banks that don’t check with Chexsystems when opening new accounts, or that check it but don’t necessarily reject you if you have a negative entry. You’ll find that the big boys like Chase or Bank of America won’t really work to accommodate you. You’re much better off looking online or in your community’s smaller regional banks where it’s more likely that someone has the option of overriding a ChexSystems report.
2. Speaking of negative Chexsystems entries, it would be best if you could get rid of those. Chexsystems will typically not respond to a removal request unless it comes from a bank, so you should get your Chexsystems report and contact those institutions with which you have outstanding unpaid balances. Work something out with them, with the agreement that once the debt is paid off, they will write to get you out of Chexsystems’ database. Get that agreement in writing. If this can’t be done, have them at least give you an official note stating that the debt has beenpaid off.
3. If the unpaid account balance was pre-petition (before the filing of bankruptcy) and properly listed in the case, then there is a simple fix. Get a copy of the Notice of Bankruptcy and send it with a cover letter to Chex Systems. If a debt is discharged in bankruptcy, that account must be reported as “$0.00 owed, discharged in bankruptcy.” Bankruptcy should not prevent you from opening a bank account.
4. Open a savings account. There is no issuing checks, so you might have a better chance of being approved for one. It also makes it easier to open a checking account in the future. Actually, if you have a little money available, it’s even better to open a Certificate of Deposit (CD) and offer it as a collateral for any negaative balance on your checking account. This is the ultimate show of good will and will greatly reduce a bank’s reluctance to do business with you.
5. Enroll in a consumer credit course.  Some banks will view this as a positive step in the right direction if you have done this already prior to trying to open your checking account.  These classes teach you how to maintain and manage a checking account properly which banks are well aware of.

By following the above steps, it is not uncommon to get a new bank account within 60 days after a bankruptcy discharge.

Related: Banks that don’t pull your credit report

Opening A New Bank Account After Filing For Bankruptcy

If you’ve been reported to Chexsystems, contrary to what you might have been told, you do have options. This is especially true if you have been unfairly reported. What a lot of people don’t know is that Chexsystems is ruled by the Fair Credit Reporting Act and that opens up some options to you.

The first thing you can do is request a copy of your Chexsystems report. Since they’re bound by the Fair Credit Reporting Act, you’re entitled to a free copy of your report every year. This is obviously excellent for monitoring purposes.

You can land on Chexsystems’ list for a number of reasons: if a bank believes you’ve written a check with insufficient funds, closed an overdrawn bank account, or if you’ve done anything that the bank doesn’t approve of, they will report you. Once your name is on that list, you’re led to believe that it’s supposed to stay there for five years, and that you will only be able to open accounts through second chance checking. But that’s only if you don’t do anything about it.

When you receive your report after requesting it, check it carefully. Make sure that all the information that’s included there is accurate. If, for example, you had an overdraft account that was then closed, and in the meantime you paid it off, the bank is required to mark that it was paid in full. Check whether or not that was reported correctly. Anything that you spot that is incorrect, make a note of it for your next course of action.

Said course of action involves writing a certified letter to Chexsystems, where you dispute whatever is wrong in your report. You should address the letter to

ChexSystems, Inc.

7805 Hudson Road, Suite 100

Woodbury MN 55125

Your Chexsystems report includes a “consumer ID number”. Use that to identify yourself, along with your name, just to make things easier. List the incorrect information, and then the correct information as it should have appeared. Include a short explanation of why the information is wrong, and specify that you’re enclosing documentation. Include whatever proof you have, such as a cancelled check to show payment, a bank statement, or whatever.

Chexsystems must contact whatever bank reported the information, request an investigation, and get back to you in 30 days. If the report is wrong or can’t be verified, it will be removed.

If it’s not removed, you can add a statement to the item explaining your side of the story. Write or fax Chexsystems at the same address above, saying you want to include a consumer statement, and say what you want to appear. It must be less than 100 words, can’t mention the name of another person or business, and should be a clear summary of why the report shouldn’t be counted against you. When you apply for a bank account and the bank pulls your Chexsystems report, they’ll be able to read your statement, so think what you’d like to tell a busy banker about the situation.

If you can’t get off Chexsystems even by disputing and you’re still having trouble opening a bank account, there are non Chexsystems banks that  don’t care whether you’re on it or not. Using one of them may be the simplest solution in that case, until five years pass and Chexsystems finally removes you.

Related: Bank Of America’s Policy Regarding ChexSystems

Get Off Chexsystems

Bad Credit Bank Accounts

There are a few situations where you can find yourself looking for a financial institution (whether it be a bank or credit union) that is offering bad credit bank accounts. For example, this financial product can be very useful for people who have a poor credit history, have filed for bankruptcy, or have a County Court judgment registered against them. In either of those cases, it becomes very difficult to get a checking account at any one of the major banks.

Everyone knows that nowadays you can hardly function if you don’t have a bank account. Getting a bad credit bank account can be the first step that you need in order to re-establish yourself as a desirable customer for banks. Honestly, opening a bad credit bank account is not going to be easy. Check systems is very aggressive in its marketing to banks so that they can use its services and it’s estimated that roughly 80% of them do so. Your best bet is to check the policies of the banks where you would like to open accounts because different banks have different policies regarding checking accounts for people with bad credit.

Actually a lot of the people looking this type of account may feel some type of shame because this is not something that they would have ever thought could happen to them. But the recent economic downturn has spared nobody, and it has become easier than ever to face a bad spell and then be reported to ChexSystems, where your information remains for five years unless you’re the determined type and decide that you want to get out of Chexsystems and take the necessary action.

Opening a bad credit bank account will at least get you back into the financial world. You will once again have check writing privileges, the ability to pay your bills online, access to ATM transactions, debit cards, and so on. And let’s not forget not having to stand at the check cashing store every week or every other week and carrying large amounts of money around. So with that in mind, financial institutions have created specific products for people who need a “fresh start”, as they call it.

The first thing you need to do when looking for second chance checking accounts is to make sure that the accounts are FDIC-insured. Just in case you’re wondering what we’re talking about, the FDIC insures every bank account for up to $250,000 (actually you can get even more coverage, so it could prove useful for you to check out the FDIC’s website if you want more details about that). What that means for you, in real terms, is that any amount of money that you have in that bank (up to $250,000) is fully insured: you can’t lose it.

The second thing you need to be looking out for is whether or not this second chance checking account that you’re thinking of opening comes with a Visa or MasterCard branded debit card. This is very important. Having one of those pretty much allows you to do business everywhere those cards are accepted. That includes online shopping, ATMs, and most businesses worldwide.

Thirdly, you want to compare what the different financial institutions are offering. Specifically:

• Is there a minimum opening balance?
• Is there a minimum balance requirement?
• Are there any monthly maintenance fees?
• How much is the card reload fee?
• How much is the ATM access fee?
• How long before you can apply for a regular bank account?
• Do you get any check writing privileges?

Well, you get the idea.

Repairing Your Credit

What we’ve discussed earlier was just the short term fix. Now let’s look at the long term fix. And that, of course, is repairing your credit so that you don’t have to settle for second chance credit accounts. With a bit of planning, you can make your credit history look a lot better in a matter of months (How long does credit repair take?). Obviously, credit repair is beyond the scope of this article (or even this site) but common sense suggests the following:

• Know how much you owe and who you owe. This can be done by getting copies of your credit report from the three major credit bureaus: Equifax, Experian, and TransUnion.
• Check the accuracy of those reports. If you spot any mistakes, take the necessary steps to have them corrected.
• Put in place some type of monitoring system so that you can a) keep track of how your credit is going and b) prevent identity theft.
• Pay your bills on time.

How To Get A Bank Account With Bad Credit

There’s one thing that everybody knows by now: we’re in the middle of the deepest financial crisis since the Great Depression. The current crisis has even been dubbed “The Great Recession”. The crisis has brought financial hardship to millions of American families who have had to deal with all sorts of unfavorable circumstances.

But there’s no such thing as a totally negative situation. The fact that so many people have had (or are having) financial problems means that some situations that weren’t so widespread have become increasingly common. More and more people have seen their bank accounts get closed and/or their credit go bad because of money problems.

Usually, and especially back in the days, that would mean that you could walk into every bank you see and continuously get rejected for just about every single bank account you apply for. In a lot of cases, people who are denied a checking account have no idea why they can’t open an account, nor do they know how to solve the problem.

Why You Are Being Denied A Checking Account

There are a couple reasons that can come into play here, but it mostly revolves around a number of things:

1. You have abused the overdraft on your checking account
2. You have cashed one or more bad checks
3. You have bad credit
4. You have been found guilty of trying to cash fraudulent checks

In the last case, there’s not much that can be done for you, since even companies that issue prepaid debit cards won’t want to deal with you. Sad to say, but you’re basically on your own on this one.

Now in the other cases, you do have a few options to kind of work around your problem. See, the reason why you can’t open a bank account is that banks have a system set up to protect themselves against people that they deem they don’t want to have as clients, for the reasons we’re specified above. This system works by keeping a record of the people who commit those infractions and making this record available to all banks who subscribe to Chexsystems (this is the company responsible for the compiling the data).

Since 80% of the banks out there subscribe to Chexsystems, that leaves only 20% of them for you to work with. Well actually it might be a little more than that, since a lot of banks do subscribe to Chexsystems, but give themselves a little leeway when it comes to making the decision to open the account or not. This is because Chexsystems only supplies the information; it doesn’t make the decision for hte banks.

How To Open A Bad Credit Checking Account

As you can see, you can’t really escape your bad credit if you’re trying to open a new bank account. It will come back to haunt you. But the good news is that you can still open a checking account even if you’re been reported to Chexsystems. You can get one either from a brick-and-mortar bank or from an online bank.

If you find out that you’re on Chexsystems’ database, you can take some measures to have your name removed. But be aware of the fact that you’re not going to be paid attention to just by either calling or writing them. Since it’s the banks that report you, they’re also the ones that can have your name taken off the database. That usually requires the bank(s) that reported you to send Chexsystems a letter stating that for such and such reason, you’re clear and all issues have been resolved. So you can imagine that it can easily be a very lengthy process. In the meantime, you’re still out of a checking account.

What you can do is look for a bank that does not use Chexsystems. Most large banks won’t even look at you. You have a better chance trying some of the local non-Chexsystems banks in your area. Now don’t walk in there and act like you don’t know that anything is wrong. Be upfront about it and if possible ask to talk to a manager. In any case he’s the one who’s going to be making the decision whether or not to open an account in your favor. Be ready to provide all the basic information that can be required of you. In many cases, before agreeing to open a new account for you, if you have outstanding overdrafts in other banks you will be asked to provide proof that you’ve paid them off. Once that is done, you’ll get your checking account.

If you’re unable to find a local bank to do that, you can look online. Many online banks cater to people who have trouble with Chexsystems. An online search will return lots of results. Just be ready to prepare to sift through lots of offers so you can compare and make an educated decision on which one will suit you best.

Yet another option is to get a second chance checking account. These can come in several flavors. They’re accounts that are designed for people who have poor credit or are otherwise in trouble with Chexsystems. But beware that these types of accounts do come with some restrictions. One restriction could be that it will take more time for a cashed check to be fully deposited into your account. The banks know that they are taking on a higher risk when they are opening an account for someone with bad credit. In order to decrease the amount of risk, they will impose a certain number of limits on what you can do with the account. But as a rule, you will have access to ATM transactions, online banking and online bill pay, as well as direct deposit. Not all financial institutions have the same rules for their second chance checking accounts. So it’s your responsibility to shop around and compare different banks to make sure you are getting the best deal.

Forget about free checking, you will most likely have to pay a monthly fee. You will also have to be ready to pay certain other fees. This is because the banks view you as a risk and will charge you in order to be compensated for taking that risk.

But even if you do get to open a bad credit checking account, don’t rest on your laurels and do what it takes to get your name off the Chexsystems database and/or repair your credit so that you are able, in the near future, to open a regular checking account.

How To Open A Bank Account With Bad Credit

According to the latest available statistics, ChexSystems is doing business with roughly 80% of the banks and credit unions out there. Maybe we’re different, but while most people tend to focus on the 80% figure, we tend to see things the other way around. And the other way around is simply that there are about 20% of the banks and credit unions out there that don’t use ChexSystems. If you stop and think about it, that’s quite a lot of banks! Now we’re not going to lie to you and tell you that those non-ChexSystems banks are popping up in every corner, but if we tell you that there’s a good chance that there are a few in your area, we won’t be lying to you either.

You know the deal: sometimes there’s a company out there that ventures off the beaten path, in order to give its customers a chance at something they really need. In other words, the company takes a risk, in order to make some money by serving a neglected portion of the population. So it is with banks that offer checking accounts for people with bad credit. Because the vast majority of banks out there use ChexSystems to determine whether or not they will open a checking account for a new customer, people with a negative record are left out in the cold.

While it might have been easy to turn away people when times were good, things are different now. The economic crisis means that a lot of people have fallen on hard times and have ended up with negative marks on their ChexSystems record. That doesn’t necessarily mean that they wouldn’t be good customers for the banks and/or credit unions. So those financial institutions have started to try and look beyond this simple aspect. There are now some that simply don’t check your ChexSystems record. Some others do, but also look at other financial information before they make their decision. What that means is that banks do openchecking accounts for people with bad credit, so you can still get a second chance checking account and be able to benefit from banking services.

Related: How to open a bank account after bankruptcy

Now it’s important to point out that all banks are definitely not created equal. If you’re going to open afresh start checking account a non-ChexSystems bank, there’s a few things you need to make sure are kosher, because all it takes is for you to fall on one bad apple, and you’re pretty much screwed. Here’s how to find a “bank without ChexSystems”

Finding Good Banks That Do Not Use Chexsystems

1. The most important part of finding a non-ChexSystems bank is, of course, doing your homework to make sure that the bank(s) you’re considering giving your business to are INDEED not going to run your ChexSystems report. Sometimes, and especially when they’re in a situation where they’re opening a lot of accounts in a short period of time, they will open up the account, pending verification. After running the scan, and they find negative marks on your report, your account will be closed. Period. Or, (and that’s even more embarrassing), if the bank checks on the spot, you will be declined in public! So make sure you have your facts right.
2. The second most important thing is that, just because you’re looking for a bank that doesn’t run your ChexSystems report doesn’t mean that you should settle for just ANY bank that you find. You still need the protection that comes with that financial institution being FDIC insured. So you need to have proof that the bank is FDIC insured before you open that checking account. In the case of credit unions, they have to be NCUA insured (that’s the equivalent of FDIC insurance, but for credit unions).
3. Finally, make sure that you’re not going to get some crippled service. If you can’t get the same (or almost the same) level of convenience, then it kinda defeats the purpose to go to such great lengths. You will need to get at least the following: check writing privileges, Visa- or Mastercard-branded debit card, and online banking. Also take a good look at their fee structure, in order to make sure that you’re not getting nickel-and-dimed.

Being reported to ChexSystems doesn’t necessarily have to mean that your financial life becomes a living hell. As previously stated, there are many financial institutions (banks and credit unions alike) that will open asecond chance checking account in your area for you regardless of, or in spite of, your ChexSystems profile. All you need is to do your homework and find the reliable ones that will fit you best.

© “Banks Without Chex Systems” | How To Find A Good Second Chance Bank

The banking industry relies on a few companies to do its risk management, the most well-known of which is ChexSystems. This company keeps a record of past blemishes in your banking history and if you were to go open a bank account, this information is available to the participating banks and credit unions and will likely result in them refusing to open an account for you. Fresh start checking accounts can be opened, but of course they comes at a certain cost.

Bad Credit’s Impact On Your Banking Options

Now what a lot of people overlook is the fact that a bad credit history is also one of the factors that can put you in a situation where you can’t open a bank account. It’s obvious that being rejected for a bank account is not a pleasant experience, but when the basis of your rejection is bad credit, it’s sort of frustrating. In all honesty, opening a checking account has no connection whatsoever with your credit. But many banks have decided that having bad credit makes you ineligible for a checking account. A bad credit history should not affect your ability to open a checking account, although it does make sense that it would block you from having access to some bank account options like overdraft, personal line of credit, and so on…

Why Banks Turn Down People With Bad Credit

They base their position on the assumption that you will be a poor customer. They expect that you will overdraw your account because you don’t have enough money to pay your bills (as evidenced by your poor bill-paying history on your credit report). Returning your checks will generate fees on your account, which you may not be able to pay. Paying them will overdraw your account and you may not be able to pay back. Either way, they might have to end up closing the account and reporting you to ChexSystems, so they’d rather not open the account to begin with. In the end, many people with bad credit can’t open checking accounts, and that’s not a good position to be in.

Banks That Do Not Use ChexSystems For People With Poor Credit

If you have poor credit and need to have access to a checking account, you need to find those banks that offer second chance checking accounts, also known as fresh start checking accounts. They usually come with their own set of restrictions (you can’t overdraft the accounts and have limited check writing privileges) and costs (minimum opening balance, minimum balance, monthly fee), but it’s such a wide and largely untapped market that competition is picking up. Which means that you can find a bad credit checking account with check writing, no minimum balance, and a reasonable monthly fee of around $5.

Your best bet is to look online. This is such an ever-changing field that no list could realistically be kept 100% accurate. But whatever you decide to do, use the internet to do some comparison shopping, so that you can get a poor credit checking account that works best for you.

Related Resources: Bad Credit Low Income Loans - Build credit with secured credit cards

© Checking Accounts For People With Bad Credit