Checking Accounts for Bad Credit

Checking accounts are necessary in today’s world. Individuals with poor credit can open an account online to use for bill payment, direct deposit and other forms of money management. Online banking is available 24/7 and will offer lower costs than a traditional bank. Successful management of an online checking account could be your first step towards getting other accounts like credit cards and loans from your bank.  People with bad credit should opt for checking account for bad credit. It’s never a good experience when the bank denies you an account

simply because you have a few problems with your credit. Poor credit and obtaining a checking account are not related. Sadly banks still rely on your credit to decide if they will give you a checking account.

With a poor credit score most banks will think you are not a good customer. They’ll assume you won’t be able to pay your bill or will over draft your account. This is why it’s difficult for people with poor credit histories to open checking accounts.

If you have bad credit then you will have to show the creditors that you are credit worthy. If you haven’t got good credit you it will be very difficult for you to qualify for a credit card. If you do get a card you will have a very small credit limit until you show that you can manage the money. Another, less desirable, option for people with bad credit is to pay a deposit and use a secured credit card.

1. Step 1

Obtain your credit report and review it for any errors (see Resources). Even small errors can affect your score and an increase will improve your chances of opening a checking account online. 2. Step 2

If you do not own a credit card then you should get a prepaid debit card. Many with poor credit don’t use credit cards –prepaid debit cards are available in convenience stores. This credit/debit card will be the funding source for your account. Most people open their accounts with a $100 deposit. 3. Step 3

Get a basic account at a larger bank (Bank of America, Wachovia). You can usually open basic accounts online if you opt to add direct deposit from your employer. After you have opened the account you will need to set up direct deposit with the human resources department at your workplace. Limited accounts offer the same things as a checking account but place a limit on how many teller transactions can occur. 4. Step 4

If you are not able to open a basic account try using an internet bank. You may need to open with a larger deposit but these banks often do not require high scores. Some legitimate internet banks are ING Direct, HSBC Internet Account and Emigrant Direct Internet. 5. Step 5

If you are not successful opening the basic and internet accounts, then open an investment account (Merrill Lynch, Fidelity). These accounts need large opening deposits but usually offer an additional checking account. Credit scored are not used to determine if you can get this type of account.

We’ve found that the simplest method is opening a bad credit checking account with an internet bank. Getting a checking account with poor credit is similar to trying to get a credit card. This account is used to show that lenders can trust you with money. Initially banks may be suspicious of you but over time, as your account remains in good standing, you will have a good reference in your credit. This will help you open a normal checking account.

Most banks run a credit check now. It’s very unlikely that you will be able to open a new bank account with poor credit. The best way to show banks you can handle a checking account even with your bad credit is to open a second chance checking account.

Some second chance account offer Direct Deposit. It’s also possible to get a Visa Debit Card (or MasterCard Debit Card). Unfortunately, you won’t be able to write checks from a Second Chance account. Still, this kind is excellent if you want to improve your credit. After a year, apply for a normal bank account. You should be approved.

The best 2nd Chance Checking account are offered online. It’s very easy to apply for the account with many online bank lenders. Your local bank may also offer this type of account but it will require you to complete some paperwork. Whatever you do, you want to research online for the best available option in bank accounts for people with bad credit. This way you can make the best decision for your needs.