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
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
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.