Smart Ways to Open a Checking Account Despite Your Bad Credit

How economic issues affect Americans

Out of all the American households that opted to save in 2017, 23.7 percent chose to open checking accounts. According to a report from the Federal Deposit Insurance Corporation, opening a checking account can be one of the most effective ways to set aside extra money for emergencies and other unexpected expenses.

But checking account holders are not immune from finding themselves in financial strife. some release checks with bad credit and insufficient funds while others become too reliant on overdraft facilities. These actions can bar individuals from opening another checking account if they want to look for a new bank. Here are some alternative ways to start saving through a new bank account even if you have bad credit. 

Look For Banks That Allow Second Chances

Opening a checking or savings account with a bad credit score may not be as easy as you think. Most of the time, financial institutions would use ChexSystems to look into your credit history. If the bank discovers that you have a poor FICO Score level between 300 to 580, they may not allow you to open an account.

These financial institutions may also check if your previous accounts were closed due to unpaid balances or fraudulent activities. If you want to start anew and build up your credit, you can ascertain which banks allow second chance checking on Crediful. It has a comprehensive list of financial institutions that allow people with low credit scores to redeem themselves and open a new account. 

Fix Your Negative Records

If you are unsure about the accuracy of your credit score, you can ask ChexSystems to give you a copy of your credit report. Keep in mind that the national consumer-reporting agency may provide you with a free copy of your report only once a year. If you notice that the report has an error, you can disprove it with the agency and gather all evidence to support your claims.

This should include all receipts and statements showing that you’ve already paid some of the items enumerated in the report. It usually takes 30 days to solve the problem. Once the issue is fixed, you can try to apply for a new bank account. 

If the ChexSystems report about your finances is accurate, you will need to start paying off all your debts to improve your credit rating. If possible, try to reach out to your creditors and inform them that you have the intention to pay off your debt. 

After fixing your past financial mistakes, now’s the time to start building your savings. While the process may take years to amend, you can also browse through the list of banks that allow second chance checking and help you make the next decision on where you want to entrust your money.   

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