Can You Open A Bank Account With Poor Credit?

June 19, 2024 By: Eliyah A. - CreditMonarch Online Writer0 comments

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Bad credit is a problem that can happen to anyone, but it does not indicate that you are a bad person. In reality, there are millions of individuals who struggle with bad credit. Many American’s credit scores are either poor or very poor.

Although bad credit may not reflect one’s character, a low credit score can still make many financial tasks difficult or more expensive. If you have poor credit, you may be concerned about facing difficulties when opening a new bank account. The good news is that your credit is not usually a factor when it comes to being able to open a bank account. Your ChexSystems report, which is different from a consumer report, may come into play if you have a history of negative banking activity.

It’s clear that your credit score is an important factor in your financial life. Your credit report or credit score is typically not checked by financial institutions, such as banks and credit unions when opening a new deposit account. Having a bad credit score doesn’t necessarily mean you won’t be able to open a bank account like a checking or savings account. When you apply for a new deposit account, banks will often review a different consumer report called ChexSystems instead of reviewing your traditional credit reports from the three major credit bureaus (Experian, Equifax and Transunion).

ChexSystems provides consumer reporting services, just as Equifax, TransUnion, and Experian do. Instead of obtaining information about how consumers manage credit obligations, ChexSystems gathers information on their deposit accounts and banking habits. If your ChexSystems report has negative information, you may have a harder time qualifying for a new bank account. Negative information on a ChexSystems report may consist of bank accounts with negative balances, bounced checks, overdrafts, or involuntary account closures, among others.

With all that being said, a poor credit score typically won’t stop you from opening a bank account, but negative banking history could be a problem. If you have a poor credit score and are looking to apply for a credit card, CreditMonarch is here to help you find the perfect credit card for you. Check out our recommended list below of the best credit cards for poor credit of 2024.

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