Having bad credit is self-perpetuating: the worse your credit score, the harder it can be to get out of debt, start paying your bills on time and turn your financial life around. Regardless of your credit score, one of the most important building blocks of having a normal, healthy financial life is to have your own checking account.
If you have tried one or more times to get approved for a new checking account but have been rejected, you may believe that your credit score has something to do with your situation: it doesn't.
The Anatomy of a Bank Account Rejection
In reality, getting your checking account application rejected has nothing to do with your credit, or FICO, score. Rather, the sole purpose in life of your credit score is to determine whether you are eligible for auto, mortgage, or personal loans and what interest you qualify for.
The Real Culprit: Chex Systems
The real culprit in your acceptance or rejection into a new checking account is something called Chex Systems. This is a risk assessment database that banks use to share information with each other about customers or ex-customers whom they deem to be a banking credit risk. Your name can get reported to Chex Systems for any number of reasons, including:
a. you still owe a previous bank with which you did business money for their covering one of your past charges that resulted in an overdraft.
b. you committed some sort of bank fraud – or something that could be easily mistaken for bank fraud
c. you committed or are suspected to have committed check fraud at some point in the past
d. for some other reason, some bank out there thinks you represent a risk
Your Backdoor: Second Chance Checking
Fortunately, if your name has been reported to Chex Systems, you do have another option: opening a second chance checking bank account. These checking accounts are identical in every way to a "regular" checking account, except for the fact that they the bank does not refer to Chex Systems during the application process. Bottom line: even if your name is on Chex Systems, it will not matter at all in terms of whether you will be approved for a new account.
If you want to find bad credit checking accounts with guaranteed approval, read on.
Finding Bad Credit Checking Accounts
To get a bad credit checking account, you need to:
1. Get out a piece of paper and create a list of at least 5-10 second chance checking banks.
2. Review their websites to determine which one looks like a fit for you.
3. Apply, but don't worry about being declined – even if you have a poor FICO score and / or if your name appears on Chex Systems.
Bad credit checking is actually within reach for most people. Now that you know that your past rejections by banks has nothing at all to do with your credit score, you have a better understanding of how to get an account. Find a second chance checking bank and you are guaranteed approval.