For Bank AccountsThe cash economy is dead and gone. We live in a credit-based world, and your credit score affects just about everything you do that involves money. Having bad credit increases the difficulty of just about everything ten-fold. These difficulties are not restricted to big-ticket items like getting a mortgage or a car loan. Unfortunately, even something as basic as opening a bank account can be a task and a half. Don't give up, though. It's not impossible to open a checking account with bad credit--you just have to know the tricks of the trade.
Here's the Inside ScoopThree major agencies are tracking your credit score: Experian, Equifax, and TransUnion. If you haven't already found out the hard way, having bad credit can negatively affect your ability to get mortgages, loans, and credit cards. Bad credit by itself doesn't necessarily affect your chances of opening an account directly. Your overall credit history is more important. Having an overall history that looks as risky as a weekend in North Korea is what will affect your ability to open checking or savings accounts.
Most financial institutions don't use the standard credit checking systems. They have their very own credit checking system, and they track your banking behavior, not your credit history. Rather than Experian, Equifax, and TransUnion, the three agencies used by most major financial institutions to track this data and vet potential clients are ChexSystems, Telecheck, and Early Warning System (EWS).
Old Habits Die HardYour ability to obtain a checking or savings account is not only about your credit score, though there may be some impact. The history of your banking behavior is what matters most. Still, not all institutions use ChexSystems, Telecheck, or EWS. Some may base decisions on your credit score. Even if your bank does have access to these agencies, they may also consider your credit score.
Don't feel too bad, though. You might have great credit, but if the bank relies heavily on a ChexSystem record (as about 80% of major banks do), they still might reject your application. You win some; you lose some.
StrategiesStart with research! You need to shop around and find out who will offer you favorable terms, regardless of your bad credit. One bank might look at your credit score and send you packing, while another might review your banking history and roll out the welcome mat.
Well, look what we have here--an alphabetical list of the best options for people with bad credit right here.
AxiomA federally chartered community bank, with 20 branch locations in Central Florida, Axiom Bank offers checking and savings accounts, with online options. So does every bank, right? What makes Axiom special is a unique checking account that's specifically for people with bad credit. It's called an Opportunity Checking account. Yes, a bank that believes in second chances. Who knew?!
What's even better is that there isn't a catch. The Opportunity Checking account has no minimum balance requirement, you only pay a $12 service fee each month, and the deposit to open the account is just $25. It even comes with online banking. Opening an Opportunity Checking account also rewards you with your very own Axiom Debit MasterCard with secure chip technology. There's no extra cost for any of this! Who owns this bank, the Dalai Lama?
BBVA CompassBeing one of the biggest banks in the Sun Belt states, BBVA Compass is one of the best options out there for people haunted by bad credit. They offer several signature products, known as Second Chance Banking options. The available products include two different checking accounts, a savings account, prepaid credit cards, and even a regular credit card, all for folks with bad credit.
The checking accounts come with online banking, mobile banking, and low monthly fees. You might even get an upgrade to free checking if you maintain a good record! You can also get your hands on BBVA Compass Bank's secured Optimizer Credit Card, a card specifically designed to help you repair and build your credit history!
City National BankWith 75 branches across the United States and over $36 billion in assets, City National Bank has a lot to offer, especially if you're dealing with bad credit. They offer the Bounce Back Checking account, which is exclusively for people with bad credit. You'll pay a tiny initial fee (less than $10). It comes with online and mobile banking, several overdraft options, and there is no minimum balance requirement.
You'll also have access to the Gold Debit MasterCard, which acts like a debit card and ATM card!
GoBankGoBank is quite a unique and innovative financial institution. By using the GoBank mobile app, you can avoid the fees usually associated with big banks. The Federal Deposit Insurance Corporation (FDIC) also insures all account funds, as GoBank is a part of Green Dot Bank.
Now, here's where it gets interesting. The "change how everyone banks" philosophy of this system allows just about any adult to get an account! Your bad credit shouldn't hang over your head here. Accounts have no overdraft fees or non-sufficient funds (NSF) fees, and no ongoing balance requirements!
A small opening fee is required (between $2.95 and $20, depending on how you open the account), and the only catch is a monthly fee of $8.95. However, GoBank will waive the fee if you deposit $500 or more each month. It may be an online bank, but you can also make cash deposits! You can make deposits (known as Simple Deposits) through any Walmart, Rite Aid, or CVS location.
OneUnitedAnother FDIC insured online bank, OneUnited's mission is to support economic development by providing communities with affordable financial services. They also have several physical locations in California, Florida, and Massachusetts.
OneUnited offers "second chance" online checking specifically for folks with credit issues, known as a Unity U2 e-Checking. You get access to all the fancy online and mobile banking, pay no surcharge on ATM withdrawals from select locations (25,000 ATMs across the United States) and pay only a $50 opening fee. You can also deposit checks via the OneUnited apps, Mobile Remote Deposit Capture.
People's Cash SolutionsTalk about getting right to the point! People's Cash Solutions is not a bank; it's an online checking account designed for folks with bad credit! Provided by the Texas-based People's Bank, this second chance checking account is FDIC insured, and available to anyone, anywhere in the United States. You can sign up for direct deposits and can add money via PayPal, wire transfer, government deposits, or even over the phone with a debit card.
There is no opening fee, minimum balance or check fees, and you can get your cash out from ATMs, internationally. You even get your own debit MasterCard.