Bad credit has the power to impact your life significantly in a wide number of ways, including your ability to open a bank account. But if you have gone through financial challenges and have bad credit, you might find it really difficult to open an account. Poor credit history and a bad credit score make life just that much more difficult when dealing with traditional bank accounts. Major banks shy away from giving these types of customers a new bank account and may use the ChexSystems record and a consumer report to determine if they are eligible.
According to a 2019 report by the FDIC, an estimated 5.4 percent of U.S. households were “unbanked” in 2019. This means that no one in the household had a checking or savings account at a bank or credit union. This proportion represents around 7.1 million households in the U.S. This is actually a financial hardship for folks since the fees for these services costs more than going to regular banking institutions.
Alongside, an estimated 16% of the U.S. households were “underbanked,” where a household has a bank account but goes outside of the bank for financial services such as money orders, check cashing, payday loans, and more.
How to get a bank account with bad credit?
Having bad credit doesn’t necessarily mean you’re done with banking forever. There are still some banks that do not require a credit check. Millions of people are in the exact situation because of bad credit caused by missed or late payments, overdraft fees, and account closures.
This shouldn’t discourage you, as you can still open a bank account with bad credit. The good news is there are second chance accounts banking opportunities for people with poor banking history, but you must understand what banks to look for, to seize such an opportunity. Your past mistakes will not necessarily haunt you forever.
Follow these four steps to get a bank account with bad credit:
Find Banks That Do Not Use ChexSystems
The first step to opening a bank account with bad credit is finding what banks don’t use ChexSystems. This is because almost every bank uses ChexSystems to review a customer’s credit reports and banking history.
A ChexSystems report may show records of unpaid fees, negative balances, overdrafts, and charge-offs, which can be potential reasons for a bank to reject your account opening application.
So, your first move is to find banks that would agree on looking past your credit reports and offering you a second chance to rebuild your banking history. When you search for a bank, ensure closely reviewing its policies. Most banks that offer second chance checking accounts come with a big list of requirements and limits.
Get your ChexSystems Report and Dispute Errors
You may already know about credit reports and the actions you must take to keep improving them. Similarly, another sector that keeps a record of your financial activities is ChexSystems.
The difference between a credit report and a ChexSystems report is that instead of information about your credit history, it collects information about your checking account history.
According to Federal laws, you’re entitled to one free ChexSystems report every year. Other than that, if you’re denied a bank account, loan, or job due to the records on your report, you can get a free report within 60 days of the denial.
Once you have your report in hand, review it closely for any mistakes or errors. You can dispute any negative information on your report if it is inaccurate, but you must have proof for the same.
Use the online dispute form or submit it by mail or via fax.
Request The Bank For Reconsideration
If your account opening application is denied, you can request the bank to reconsider your situation. In rare cases, some banks might be willing to look past your negative banking record if you have a proper explanation.
For example, maybe a family member experienced a sudden serious health issue that resulted in you paying some bills late or checks getting bounced. Or perhaps the company you worked for went bankrupt, and you had to find new employment.
If you have a genuine reason behind financial abnormalities in your report, the bank might understand and reverse its decision.
Open a Second Chance Checking Account
Second chance checking accounts are one-step down versions of regular accounts, typically with certain limitations, fewer features, and low spending limits.
It can be more than difficult to rebuild your finances when you have bad credit, or poor banking history, or no account at all. A second chance checking account is an opportunity where the bank doesn’t go through your ChexSystems report, or it simply agrees to look past your historic missteps and financial problems.
These accounts usually have a monthly fee that you cannot waive and many other strong requirements compared to standard checking accounts. But if you look at the bigger picture, a second chance account offers customers (like you) with troubled historic records a fresh opportunity to show they can bank responsibly.
10 Best Bank Accounts for Bad Credit
Here’s a list of 10 best checking accounts for bad credit:
Chime
Most of the time, finding banks that don’t use ChexSystems can be hard. A single minor blemish on your report can make banking hard to access. Furthermore, it can be challenging to keep track of your finances without a checking account.
If a traditional bank account has ever denied you due to bad credit, Chime is your best go-to option for a second chance bank account that comes along with a long list of unique features for a great banking experience. Chime will help you be in control of your financial health and rebuild your banking history.
Many other standard checking accounts and saving accounts are really expensive just to maintain every month. These accounts sometimes charge unnecessary and high banking fees that can add economic challenges to people with credit issues.
Chime offers a second chance bank account with no hidden or unnecessary fees. Sign up for a Chime account today and enjoy these features:
Pros of Chime
- No overdraft fees
- Zero monthly maintenance charges
- No foreign transaction fees
- No minimum balances fees
- 32,000+ surcharge fee-free MoneyPass ATMs
Cons of Chime
- No branches for in-person service
- High fees to deposit cash
- Customer service
Sign up for a Chime second chance banking account here!
BBVA Easy Checking
One of the top 25 biggest commercial banks in the US, BBVA offers a second chance account to customers in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas.
BBVA has a total of 650 branches located in the mentioned states, along with an online banking network in all 50 states. Its network size and market share is a major plus point for account holders at BBVA. In addition to this, the BBVA banking network also offers over 55,000 free ATMs all around the country.
Pros of BBVA Easy Checking Account
- Only $25 to open an account with great benefits
- Get unlimited mobile deposits, online bill payments, check-writing, and cashback rewards
- One complimentary Visa Debit card
- FDIC member free BBVA USA ATMs
- No ATM fees at 55,000
- Opportunity to upgrade to a standard account after 12 months if your account meets these requirements:
- Your BBVA Easy Checking account is in an active status
- Your BBVA Easy Checking account has a positive balance
Cons of BBVA Easy Checking Account
- A monthly service charge of $13.95
- Insufficient funds fee of $38
- Deposit item returned fee of $15
- ATM charge when you bank out of network: $3
BBVA is your second best option to get a bank account with bad credit. Even with a monthly service charge of $13.95, its size and unlimited benefits make it worth it. Plus, you’ll be eligible to get a free checking account after 12 months!
Open an account by calling at 1-844-228-2872, online, or by visiting the nearest BBVA branch.
Wells Fargo
Opportunity Checking account by Wells Fargo, one of the biggest banks in the country, is a great offer for people with past credit problems or poor banking history. Wells Fargo is a well-known bank, available in most U.S. states, which makes it an advantage to open an account here.
If you open an Opportunity Checking account, you will have access to numerous features and benefits that customers with regular accounts enjoy. Many such features include:
Pros of Wells Fargo
- Free transfers between Wells Fargo checking and saving accounts
- Paid overdraft protection
- Online banking with Bill Pay
- Platinum debit card, with Zero Liability Protection against unauthorized charges
- A minimal initial deposit of $25 only.
- Mobile banking, customized to send alerts on suspicious activity, payment due dates, and low balances
- Free ATM withdrawals at over 13,000 Wells Fargo ATMs across the U.S.
- Opportunity to convert to a standard checking account after 12 months.
Cons of Wells Fargo
- Unavailability in all states
- 3% international debit card purchase transaction fee
- $10 monthly fee unless your daily balance is ≥ $1500, or you receive direct deposits that total $500 every statement cycle
The best thing about Wells Fargo is that the bank has over 5400 branches across the country, making it easier to access for people who find in-person services convenient.
Find more information on Wells Fargo Opportunity Checking here!
GoBank Online Checking
Owned by the Green Dot Bank, GoBank is an online bank (mobile-only) that offers second-chance checking account options to people with bad credit. It’s one of the best, as your application will not be rejected or denied for either negative bank information or bad credit revealed through ChexSystems.
You will get everything you need in the GoBank checking account, and even when it’s an online bank, your funds are completely FDIC insured.
The most impressive feature that GoBank offers is the availability of a huge ATM network, along with in-person deposits at 100,000 retailers like Walmart, Rite Aid, CVS, and 7-11.
Pros of GoBank Online Checking:
- A minimal initial deposit of $0 online, or $20 if you choose the GoBank starter kit
- Secure online banking with Bill Pay
- Checking accounts come along with a free debit card
- Overdrafts aren’t permitted, which simply means no overdraft fees
- Mobile banking, with account alerts and mobile check deposits
- Transaction of money within GoBank or PayPal
- Availability of paper checks, quite rare with mobile-only banks
- Access to a huge ATM network, with 42,000 in-network ATMs
- You can make deposits in your account at 100,000+ retailers like Walmart or Walgreens
- Budget & Fortune Teller app: You can track both your expenses and income by setting up a budget using this app
Cons of GoBank
- No offline bank branches
- ATM withdrawal limit of $500 per day
- $3 fee for out of network ATM withdrawals
- Cash deposits at retailers may cost up to $4.95 per deposit
- Personal check deposits limited to $500-$1000 per day
- A foreign transaction fee of $3
The pros of GoBank Online Checking account outnumbers and outvalues the cons easily. You can open an account at GoBank here and enjoy unlimited benefits even with bad credit.
Radius Bank Essential Checking
For customers with bad credit, the Radius Bank Essential Checking account not only offers a full-service checking account but also helps customers manage their money using powerful technology.
It is designed exclusively for people who do not have a perfect banking record. The account can even be upgraded to a Rewards Checking account after 12 months of banking.
Pros of Radius Bank Essential Checking
- No minimum balance required to open an account
- Online banking with Bill Pay
- Paper Checks availability
- Daily debit card limit of $500
- 1% cash back on purchases
- Use Venmo to pay family & friends
- Can add Apple Pay, Google Pay, and Samsung pay to debit card
- Opportunity to upgrade to a Rewards Checking account after 12 months of positive banking history
- Financial Dashboard that enables you to link and monitor other external accounts
Cons of Radius Bank Essential Checking
- No offline bank branches
- $9 monthly maintenance fee
- $5 overdraft fee processed each day the account remains overdrawn
Click here to learn more about Radius Bank essential Checking or open an account with bad credit!
Bank of America
How to get a bank account with bad credit? Here is a great option to get a second chance checking account to start building good banking history again.
With its strong reputation, Bank of America is another great option with major brand-name familiarity. It offers a wide range of checking accounts, including a second chance checking account known as the SafeBalance Banking account.
Pros of SafeBalance Banking
- Huge ATM network with fee-free transactions
- A minimal fee of $2.50 at out of network ATMs
- Zero overdraft fees
- Same-day cash, wire, and direct deposit transfers
- Mobile deposits
Cons of SafeBalance Banking
- Monthly maintenance fee of $4.95
- $25 for account opening
- Paper checks unavailable
Learn more about the SafeBalance Banking account here!
Axos
Founded in 2000, Axos is known as the ‘oldest and most trusted digital bank’ in the country. It is a well-known online bank (some physical branches in California) that offers all the banking services you could need.
Among these numerous banking services, Axos also offers a second chance checking account.
Pros of Axos Second Chance Savings
- Zero Monthly Maintenance fee
- Interest-bearing account
- Mobile banking
- ATM Card available
Cons of Axos Second Chance Savings
- Initial $50 deposit to open an account
- Debit card daily transaction limit of $310 on ATM withdrawals
- Monthly maintenance fee of $6.95, which can go up to $8.95 when you make an irregular & unscheduled direct deposit
Click here to learn more about Axos Bank Second Chance Savings!
Corporate America Family Credit Union
Another great option to get a bank account with bad credit is by becoming a Corporate America Family Credit Union member. They offer a fresh start checking account that provides you with a chance to rebuild a positive checking history and fix your credit. Many credit unions offer second chance banking.
To become a member, you need to qualify through the Hope Group. Then you can fill in all the details and get your checking account started.
Pros of Corporate America Family Credit Union
- Be a member of the Credit Union
- Bill Pay and Popmoney
- Visa debit card
- In Balance, a free online study course that offers you tools for better banking & managing experience.
Cons of Corporate America Family Credit Union
- Monthly maintenance fee of $10
- Must keep $100 in your account all the time
Click here to learn more about CAFCU and open a second chance checking account today!
Aspire Fresh Start Checking
If you’re having trouble getting approved for a checking account at banks or other financial firms, Fresh Start Checking by Aspire is just for you. It is hope for people who wish to rebuild their poor banking history and create a positive financial record.
Pros of Aspire Fresh Start Checking
- Zero monthly maintenance fee
- No ATM transaction fee when you use the surcharge-free ATM network
- A free debit card linked to your account
- A huge network of 70,000+ ATMs that assert no additional fees if you stay in-network
- My CU Online and Call24 for free online & telephone account access
Cons of Aspire Fresh Start Checking
- Mandatory direct deposit of your entire (100%) paycheck
- Mustn’t have any fraudulent activity record in your banking history
Click here to learn more about Aspire Federal Credit Union!
First American Bank
With a low opening deposit amount, zero minimum balance requirement, and great digital tools that help you manage your account better, First American Bank is amazing for people who need a bank account with bad credit.
It even offers in-person branch locations in Illinois (primarily in Chicago) and one branch in Coral Gables, Florida.
If you have ever had problems opening a checking account at other banks, we believe First American Bank’s Fresh Start Checking will really give you a fresh start at banking again.
Pros of First American Bank
- Zero-charge mobile & online banking
- First American Bank Mastercard debit card free of cost
- eStatements at no additional cost
- Unlimited check writing
- No minimum balance requirement
- Access to 55,000+ Allpoint and Presto ATMs
- Free Bank-by-Phone
Cons of First American Bank
- $50 deposit to open an account
- Monthly Maintenance Fee of $9.95
Click here to learn more about First American Bank’s Fresh Start Checking!
Essential Things to Consider When Opening a Second Chance Checking Account
Now that you know the best bank accounts for bad credit, here are some things to keep in mind while choosing your preferred bank to go with.
- Low or No Maintenance fee: The last thing you want is your bank eating up your hard-earned money in the name of monthly maintenance. But the reality is that most second chance checking accounts require you to pay a monthly service charge.
However, not all banks charge this fee. For instance, Aspire and Chime offer incredible second-chance checking accounts with zero monthly service fees.
Other than that, banks like Wells Fargo waive the monthly service charge as long as you keep your balance above the monthly minimum.
- Low or No Monthly Minimum Balance: Avoid banks that ask you to keep a minimum balance in your checking account at all times. This is because when all your focus must be on repairing your banking history, it is best to avoid any possible hurdles.
Look for accounts that do not require a monthly minimum balance or at least an account with a minimum requirement close to nothing.
This way, you won’t have to worry daily about going under the minimum and getting slapped in the face with high fees.
- Benefits (Free of cost): There are a ton of banks out there, and they compete hard to be the best. In such an attempt, a lot of banks offer free services and benefits that attract potential customers.
You must lookout for some popular services—a debit card attached to your account, free bank e-statements, online bill pay, mobile check deposits, and unlimited check writing.
- Mobile Banking: Gone are days when you could use your mobile phone, only to check account balance. Nowadays, mobile apps have made most banking services accessible right in your hands.
You can transfer money, apply for loans, check credit score, make direct deposits, avail credit cards, check bank statements, and so much more using just your phone.
The ability to see through your account and check specific details easily can be a big help when you need all your focus in repairing your banking history.
- Physical/In-person Branches: As great as mobile banking can be, many people (who may not be good at technology) prefer the convenience of in-person services.
In addition to that, the physical availability of a bank can be much more helpful than a mobile phone if you wish to start a new business and need a loan. This is one of the reasons why many people like to build banking relationships with financial institutions that have a physical presence.
The Advantages and Disadvantages of a Second Chance Checking Account
A second chance checking account comes with different approval requirements as compared to regular bank accounts. These accounts often have limitations and rarely offer freebies. Here are the pros and cons of a second chance checking account:
Advantages
- Available to people who need to get a bank account with bad credit
- More convenient than using prepaid debit cards or paying with cash at retailers
- Gives you a chance to rebuild your banking history
- Having an account also prevents you from charges that come with cashier’s checks, money orders, prepaid debit cards, and check cashing services
- A chance to get a regular or standard checking account after 12 months of positive position with the bank
Opening a second chance checking account is the most important step to building a good relationship with the bank. Once you prove to the bank that you’re responsible and capable of managing your money, you will have better odds of getting approved for bank offers, loans, and other financial products.
Disadvantages
Since a second chance checking account can be really important, it comes with many limitations and downsides. Here are some disadvantages to know about before opening a second chance checking account:
- High maintenance fees that can go up to $20 a month
- Some accounts do not offer checks, direct deposit, and overdraft protection.
- It will not help you repair bad credit. If you have bad credit, you will have to take separate steps to fix it. You can go through our mini-guide on “How to fix your credit in simple steps.”
- Minimum monthly balance requirements
- Minimum opening deposit requirements
Bottom Line
Second chance checking accounts are exactly how they appear to be: a second opportunity to show that you can be a responsible customer, even if you have had financial troubles in the past.
These banks for bad credit are your best options to take advantage of a second opportunity. Ensure keeping notes of your balance, and avoid overdrafts so you can keep your accounts in good standing. Do not make mistakes you made in the past, and you’ll have a regular checking account in no time!
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