Have you repeatedly been overdrawn on your checking account? Do you have bank penalty fees that you can't pay? Have you closed bank accounts due to these problems? Have banks closed your accounts for these reasons? How will you find a new bank to accept you as a checking account customer? Banks want to protect themselves from negligent customers The banks use a service called Chex Systems Inc. to report your negative checking account history with them.

Chex Systems, Inc. is a company that banks can file a report with regarding customers that have abused the privilege of banking with them. The negative report will remain with them for five years. Therefore, when you apply to other banks for a checking account, they have a way to check out your history with checking accounts. Learn more about Chex Systems.

Even with bad credit, you have options for finding a checking account under these circumstances. If you have a negative rating with Chex Systems, there are things you can do to get yourself removed.

What is a second change checking account?
Second chance checking accounts are for people who have a history of banking problems and have been reported to Chex Systems, Inc. These accounts will be bare boned and have limitations, but you will probably be relieved to know that you have this option. You may have to pay higher fees, and you may have to guarantee direct deposits of your paycheck. It is possible that you will have to bank online and not be able to write your own checks. This will limit you to using cash from debit cards and buying mail orders to pay other bills. The good news is that second chance checking accounts give you an avenue to rebuild your positive relationship with financial institutions. Often, as time passes your fees will decrease and eventually you will be granted a standard checking account. This will help boost bad credit in general also.

How can I find second chance checking account?
According to the Federal Deposit Insurance Corporation (FDIC), approximately 35% of financial institutions offer second chance checking account options. Most of them do not make this information public because they do not want to invite too many risky customers. You can search online for specific banks that offer second chance checking accounts, but be cautious because sometimes these results are not current. Also go to banks in your city and inquire about opening a new account.

The first rule of thumb when applying for a checking account with damaged credit would be to NOT offer this information about yourself. Talk to the bank about their approval process. Ask if acceptance is guaranteed. If the bank says they are doing a bank history check with Chex Systems (some banks don't use Chex Systems), THEN offer the fact that you are looking for a second chance account. Note that applications for these accounts that are rejected may further damage your credit, so be cautious about where you apply.

Road to Recovery
A Second Chance checking account is part of your road to recovery from bad credit. You must be sure to maintain and control your balance in your checking account. Many banks will keep an eye on your second chance account to see if you are handling your finances well. This second chance checking account is a temporary setback which, if handled well, can lead to the bank approving you for a standard checking account. You will be on your way to repairing your credit.

Related Reading:  
What is ChexSystems?
Banks That Don't Use ChexSystems


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