The terms or laws applicable to the checking account you choose are determined by the servicing bank and are subject to the Federal Reserve's regulations. These rules may change as deemed necessary but your bank will be required to notify you of any significant change in terms. This commonly happens to changes in interest rates or fee changes made by the bank.
What Causes Bank Checking To Be Denied...
Because banking is a highlyregulated industry, an individual who hopes to get a checking account with bad credit may still be subjected to an approval process. This makes it difficult for people with a bad credit history or an negative entry under the Chex Systems to get a bank account approved.
The Chex Systems is an organization that maintains records for financial institutions on former or current account holders who have had or are having problems maintaining their account in good standing. Bounced checks are the most common red flag the Chex Systems records and remembers. What happens is that when you bounce checks at a high frequency or have an account that is overdrawn for an extended period of time, this information will be submitted to the Chex Systems and the possibility of your opening another account will be made more difficult in the future.
You may seek to take your name off the Chex System and fix your credit history in order to get a new bank account approved. If you want professional help to fix your credit reports check out our recommended bad credit repair services today.
Typically, the account holder's name will stay on the Chex Systems list regardless of the account settlement period. Being listed with Chex is not the end of the world though, banks needs new customers and seeks to keep existing account holders, so the possibility of opening a checking account is still available. There exist a number of checking account product offerings which are generally considered second chance accounts.
Providers of Bad Credit Bank Checking
The following companies provide bank checking accounts for bad credit people. In some cases the bank simply doesn't reference the Chex System or the bank specifically offers bad credit checking accounts:
Bank of America Advantage Checking Account
JP Morgan Chase Access Checking Account
Wells Fargo Opportunity Checking Account
Citizen Bank Second Chance Checking Account
PNC Bank Fresh Start Checking Account
US Bank Second Chance Checking Account
In addition there are a number of state specific local banks that offer second chance bank checking accounts for people with bad credit. These banks can be found referencing the state you live in and referencing their websites. Digital online banks are also enjoying an increase in popularity and a number include second chance checking accounts in their product offerings as well. The proliferation of these bad credit account types being offered in the financial market is in response to the growing demand caused by the recent economic challenges that have unfortunately left many people with bad credit. Credit Unions are adapting and offering second chance checking to meet the needs of their customers.
Second chance checking accounts have the following benefits and advantages:
They provide accounts holders the chance to rebuild credit reputation. Managing a household is tough, with a number of bills needing constant attention and access to a checking account helps with the accounting. While bills are being paid via check, atm or debit, account holder credit ratings can be improved. Using the bad credit checking account to pay your bills, as opposed to using cash, allows you to document responsible financial management. Proper credit building account management requires no bounced checks and other forms of returned payments due to insufficient funds. Penalties which may be charged such as overdraft fees need to be avoided.
Checking accounts for bad credit can be expected to have fees that are higher than regular checking accounts and they typically do not earn interest. This is the tough break businessside of getting flagged as a checking high risk account holder. For banks offering second chance accounts, they offset the additional risk with additional costs and less benefits. As an account holder you should make sure to remain compliant with the bank's policies, to stay in their good graces, and get a better checking account when you have fixed your reputation.
Monthly service fees are applicable and may not be waived or refunded. Bank's are simply less flexible with bad credit accounts. Free is no longer a financial staple when it comes to account maintenance costs for second chance checking. Fees may only be adjusted for these accounts if a bank error is found, though we recommend talking with your representative all the same, it won't hurt and helps build the relationship.
Second chance checking usually offers the option for an upgrade to a regular checking account after a trial period. With due diligence in proper account management, as an account holder you can eventually improve your credit and move up to the greater benefits of a normal bank checking account. For most banks, maintaining the account as expected and as stated in the terms and conditions can lead to the upgrade after a pre-determined period. The upgrade can also include your eligibility for a savings or other interestbearing accounts.
Second chance accounts have restrictions, there is no way around that. Your bank checking account may be classified as a checking account, but expect your second chance accounts to have limitations and not operate exactly as a typical checking account does. For example your bank may not allow you to issue personal check payments, your debit transaction amounts might be limited, and you might have a minimum daily balance maintenance requirement which can be a fixed amount before or after all debit activity. These restrictions vary per bank, it is important just to be aware and follow the rules.
Following a review of bank checking account for bad credit services, it is clear that what is created is a relationship of shared responsibility for both the bank and the account holder. The bank assumes the risk for permitting a customer to get an account despite any past mishaps. While you are empowered with second chance access to checking, but are expected to meet the responsibility, or to exceed expectations and rebuild your reputation to regain all the benefits a clean credit history can provide.
Final note of caution: In your search for a bad credit bank account, you may be asked to pay an application processing fee, do not. These fees are illigal and a sure sign that you are not working with a trustworthy, proven second chance checking provider.
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