How to Get a Second Chance Checking Account
Determine the reason banks are denying you a checking account., Realize that you are not permanently denied a regular checking account., Understand the drawbacks., Consider your other options., Get an account with a local bank., Look for other...
Step-by-Step Guide
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Step 1: Determine the reason banks are denying you a checking account.
You can check with the denying institution to find out whether it based its decision on information from ChexSystems, which reports mishandled accounts and outstanding debts to its member institutions, or TeleChecks, which reports fraud and bad checks.
If it used ChexSystems, you can order a copy of your report from that company to better understand, and in some cases appeal, the institution’s decision.
To learn more about the process, look at how to Get a Checking Account if You're Listed in Chexsystems.
You can talk to a TeleChecks representative to better understand a denial based on that company’s information.
You may also be denied an account if you have outstanding overdraft fees or if you've been a victim of identify theft.
Institutions may also use credit reports to judge your risk level and decide whether or not to give you an account.Learn how to Read a Credit Report before trying to get a second chance account.
Financial institutions that do not use ChexSystems or TeleChecks may not have a record of your former banking problems, and so are easier to obtain checking accounts from.
Online, you can find directories of financial institutions that do not use these systems.
If banks continue to reject you for a regular checking account and you aren’t sure why, always ask the financial institution for details.
Sometimes, banks mistakenly deny individuals. -
Step 2: Realize that you are not permanently denied a regular checking account.
If you have bad credit information stored in either ChexSystems’ or TeleChecks’ database, you will eventually be able to get a checking account again if you exhibit good behavior or wait long enough.
Many banks forgive former bad credit if you pay the debt and don’t have problems for 2 years.
If the information in ChexSystems or TeleChecks is fraud-related, you generally have to wait up to 5 years to receive a regular checking account.If you open a second chance account with a bank, that bank may allow you to "upgrade" to a regular account after a year or so if you have been a reliable customer., Second chance bank accounts are seen as riskier to the banks that offer them.
For this reason, fees are often higher with these accounts than they are with traditional accounts.
In many cases, they will charge a monthly fee if you do not keep a certain balance in your account or deposit a certain amount of money each month.
These thresholds are generally higher than they are for regular checking accounts.
However, you may be able to find some credit unions or banks that offer fairly good terms, like not having a minimum balance requirement.Second chance bank account may not offer premium account features, like free checks, overdraft protection, or rewards programs., If you don't want to reenter the banking system yet or are unable to find a second chance checking account, you have several other options for managing your finances and paying your bills.
When looking for these options, never use payday lenders or check cashing stores except as an absolute last resort.
These institutions can charge very high fees or interest rates which, in the case of payday lenders, can leave you trapped in a cycle of debt if you're not careful.
In contrast, you should consider these more legitimate options:
Use a Prepaid Credit Card.
These charge higher fees than checking accounts, but can be convenient way of managing your money.
Keep in mind, though, that they will not help you build up your credit score.
Get a Secured Credit Card.
Secured credit cards allow you to access a credit line equal to a deposit that you make with the bank.
So, for example, if you wanted a $1,000 credit line, you would need to deposit $1,000.
The benefit here is that this card can allow you to improve your credit score and also qualify for a regular credit card with the lender.
Money orders.
These are another safe option for paying bills.
You can get them at many convenient locations like grocery stores or the post office.
However, you may be limited in how much you can send and there will be small fees involved that can build up over time., Explore the websites of banks and credit unions that you are already familiar with to find out if they offer second chance checking accounts that you can obtain.
Many major financial institutions offer these accounts to potential customers with bad credit or with other banking problems, often with minimal fees, if any.
Read the institution’s checking FAQ’s and use the search term “second chance” or "opportunity" to locate personal checking accounts that may be right for you.
Call customer service if you’re unable to find the information on the website.
Many banks, however, do not offer this type of account or may charge high fees.
Try checking with local credit unions.Major banks may offer these accounts with relatively good terms.
For example, try look at Wells Fargo's Opportunity Checking Account, Bank of America's Safe Balance Account, or PNC's Foundation Checking.If you can't find any banks offering second chance accounts close to you, your community may have a program that can help you.
Many localities and towns have a Bank On program that works with local banks to provide this type of account.
Search online to see if your area has such a program., If you can't find an account provider among banks that you know, it's time to search online for accounts.
When you find institutions that you’re unfamiliar with offering this type of account, review all the information carefully.
Before opening the account, make sure you know the name and reputation of the bank.
Also, review the application for any hidden fees, as unscrupulous companies make money from taking advantage of individuals having a difficult time getting checking accounts.
For example, GoBank offers online checking accounts.
To get an account, buy a starter kit at WalMart or visit GoBank's website.
There are no fees or minimum, excepts for an $8.95 monthly fee., Make sure you shop around to find the best deal.
Start by looking for accounts that have a minimum balance you can afford.
After that, make sure you can afford the monthly fee or avoid paying it (by having enough of a balance or depositing enough each month).
Look for other fees that the bank may charge and compare the costs to those of other banks.
Most of this information can be found online on the websites of the banks offering the accounts., In many cases, a customer who opens a second chance checking account and stays in the good graces of the bank for half a year to a year can qualify to "upgrade" their account.
This upgrade allows you to have all of the benefits of a regular checking account at the bank.
After a time, you may also be able to qualify for a premium checking account.
This all depends on your relationship with the bank and how effectively you follow the account's rules and terms.
Ask the bank you are planning to get an account from about the possibility of your upgrading your account and how long that might take.
The sooner you can upgrade your account, the sooner you can be back to financial normalcy., Visit the institution you've chosen in person or apply online, if you can, to open your second chance checking account.
Complete the application with absolute accuracy, since misrepresenting yourself on the application will likely lead to a denial., Make sure you have the minimum opening deposit when you apply for the checking account.
The documents you will need are the same that you need when opening a regular checking account.
Be sure to bring some form of government ID, like a driver's license, passport, birth certificate, Social Security card, or state ID.
In addition, you'll need proof of address, like a utility bill or lease contract., Watch your balance and make sure that it never dips below the minimum balance requirement.
Avoid overdrafts by thinking about your balance before each payment or purchase.
Pay any fees you are charged as soon as you can and in full.
Only by being a good customer and staying on top of your account can you eventually hope to rebuild your good reputation with the banking system.Also, make sure to immediately contact the bank if you notice any suspicious activity in your account., If you maintain a good record with the bank through six months or a year with your second chance bank account, you will likely be able to upgrade to a regular account.
To do so, you'll have to convince the bank that you are a "normal" customer instead of a "risky" one.
Keep in control of your finances and soon you'll be back to enjoying the privileges of having a normal checking account. -
Step 3: Understand the drawbacks.
-
Step 4: Consider your other options.
-
Step 5: Get an account with a local bank.
-
Step 6: Look for other account providers.
-
Step 7: Compare fees and minimum balances.
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Step 8: Ask about upgrading your account.
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Step 9: Apply to get a second chance checking account.
-
Step 10: Provide the required documents and minimum deposit.
-
Step 11: Stay in the bank's good graces.
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Step 12: Upgrade your account when you can.
Detailed Guide
You can check with the denying institution to find out whether it based its decision on information from ChexSystems, which reports mishandled accounts and outstanding debts to its member institutions, or TeleChecks, which reports fraud and bad checks.
If it used ChexSystems, you can order a copy of your report from that company to better understand, and in some cases appeal, the institution’s decision.
To learn more about the process, look at how to Get a Checking Account if You're Listed in Chexsystems.
You can talk to a TeleChecks representative to better understand a denial based on that company’s information.
You may also be denied an account if you have outstanding overdraft fees or if you've been a victim of identify theft.
Institutions may also use credit reports to judge your risk level and decide whether or not to give you an account.Learn how to Read a Credit Report before trying to get a second chance account.
Financial institutions that do not use ChexSystems or TeleChecks may not have a record of your former banking problems, and so are easier to obtain checking accounts from.
Online, you can find directories of financial institutions that do not use these systems.
If banks continue to reject you for a regular checking account and you aren’t sure why, always ask the financial institution for details.
Sometimes, banks mistakenly deny individuals.
If you have bad credit information stored in either ChexSystems’ or TeleChecks’ database, you will eventually be able to get a checking account again if you exhibit good behavior or wait long enough.
Many banks forgive former bad credit if you pay the debt and don’t have problems for 2 years.
If the information in ChexSystems or TeleChecks is fraud-related, you generally have to wait up to 5 years to receive a regular checking account.If you open a second chance account with a bank, that bank may allow you to "upgrade" to a regular account after a year or so if you have been a reliable customer., Second chance bank accounts are seen as riskier to the banks that offer them.
For this reason, fees are often higher with these accounts than they are with traditional accounts.
In many cases, they will charge a monthly fee if you do not keep a certain balance in your account or deposit a certain amount of money each month.
These thresholds are generally higher than they are for regular checking accounts.
However, you may be able to find some credit unions or banks that offer fairly good terms, like not having a minimum balance requirement.Second chance bank account may not offer premium account features, like free checks, overdraft protection, or rewards programs., If you don't want to reenter the banking system yet or are unable to find a second chance checking account, you have several other options for managing your finances and paying your bills.
When looking for these options, never use payday lenders or check cashing stores except as an absolute last resort.
These institutions can charge very high fees or interest rates which, in the case of payday lenders, can leave you trapped in a cycle of debt if you're not careful.
In contrast, you should consider these more legitimate options:
Use a Prepaid Credit Card.
These charge higher fees than checking accounts, but can be convenient way of managing your money.
Keep in mind, though, that they will not help you build up your credit score.
Get a Secured Credit Card.
Secured credit cards allow you to access a credit line equal to a deposit that you make with the bank.
So, for example, if you wanted a $1,000 credit line, you would need to deposit $1,000.
The benefit here is that this card can allow you to improve your credit score and also qualify for a regular credit card with the lender.
Money orders.
These are another safe option for paying bills.
You can get them at many convenient locations like grocery stores or the post office.
However, you may be limited in how much you can send and there will be small fees involved that can build up over time., Explore the websites of banks and credit unions that you are already familiar with to find out if they offer second chance checking accounts that you can obtain.
Many major financial institutions offer these accounts to potential customers with bad credit or with other banking problems, often with minimal fees, if any.
Read the institution’s checking FAQ’s and use the search term “second chance” or "opportunity" to locate personal checking accounts that may be right for you.
Call customer service if you’re unable to find the information on the website.
Many banks, however, do not offer this type of account or may charge high fees.
Try checking with local credit unions.Major banks may offer these accounts with relatively good terms.
For example, try look at Wells Fargo's Opportunity Checking Account, Bank of America's Safe Balance Account, or PNC's Foundation Checking.If you can't find any banks offering second chance accounts close to you, your community may have a program that can help you.
Many localities and towns have a Bank On program that works with local banks to provide this type of account.
Search online to see if your area has such a program., If you can't find an account provider among banks that you know, it's time to search online for accounts.
When you find institutions that you’re unfamiliar with offering this type of account, review all the information carefully.
Before opening the account, make sure you know the name and reputation of the bank.
Also, review the application for any hidden fees, as unscrupulous companies make money from taking advantage of individuals having a difficult time getting checking accounts.
For example, GoBank offers online checking accounts.
To get an account, buy a starter kit at WalMart or visit GoBank's website.
There are no fees or minimum, excepts for an $8.95 monthly fee., Make sure you shop around to find the best deal.
Start by looking for accounts that have a minimum balance you can afford.
After that, make sure you can afford the monthly fee or avoid paying it (by having enough of a balance or depositing enough each month).
Look for other fees that the bank may charge and compare the costs to those of other banks.
Most of this information can be found online on the websites of the banks offering the accounts., In many cases, a customer who opens a second chance checking account and stays in the good graces of the bank for half a year to a year can qualify to "upgrade" their account.
This upgrade allows you to have all of the benefits of a regular checking account at the bank.
After a time, you may also be able to qualify for a premium checking account.
This all depends on your relationship with the bank and how effectively you follow the account's rules and terms.
Ask the bank you are planning to get an account from about the possibility of your upgrading your account and how long that might take.
The sooner you can upgrade your account, the sooner you can be back to financial normalcy., Visit the institution you've chosen in person or apply online, if you can, to open your second chance checking account.
Complete the application with absolute accuracy, since misrepresenting yourself on the application will likely lead to a denial., Make sure you have the minimum opening deposit when you apply for the checking account.
The documents you will need are the same that you need when opening a regular checking account.
Be sure to bring some form of government ID, like a driver's license, passport, birth certificate, Social Security card, or state ID.
In addition, you'll need proof of address, like a utility bill or lease contract., Watch your balance and make sure that it never dips below the minimum balance requirement.
Avoid overdrafts by thinking about your balance before each payment or purchase.
Pay any fees you are charged as soon as you can and in full.
Only by being a good customer and staying on top of your account can you eventually hope to rebuild your good reputation with the banking system.Also, make sure to immediately contact the bank if you notice any suspicious activity in your account., If you maintain a good record with the bank through six months or a year with your second chance bank account, you will likely be able to upgrade to a regular account.
To do so, you'll have to convince the bank that you are a "normal" customer instead of a "risky" one.
Keep in control of your finances and soon you'll be back to enjoying the privileges of having a normal checking account.
About the Author
Jennifer Kim
Experienced content creator specializing in cooking guides and tutorials.
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