Do you need a checking account but you have bad credit?
Present society has almost reached to a point of becoming a cashless society, where checks and credit cards, if not as good, are better than cash. Moreover, it also has reached to a point where your credit rating dictates your financial future. With this, checking accounts are indispensable. Checking account is a more efficient and practical way to pay bills and deposit money. Do you need a checking account but you have a bad credit?
Checking account enables its holders, business or individual to dispense personal checks or use electronic debit cards (ATM) in place of cash to transact business. However, checking account service offered by banks or financial institutions is a case to case basis and may vary on which type of customer you are. For someone whose financial stability is on the rocks and whose credit history is in bad shape, finding a bank that would allow you to open a checking account may be a challenge. Your credit rating reflects your behavior in handling debts and bills; bad credit may affect your application. In the United States, credit rating ranges from 300 – 850; and with a national average of 675, anyone who’s below it is considered a credit high risk and may be subjected to harsher plans such as higher interest rates. Nevertheless, having a bad credit is not necessarily equivalent for a denial. Do not fret; the following are steps you may take to successfully open a checking account:
· Check your ChexSystems – ChexSystems is a verification service and consumer credit reporting agency that provides reports regarding how you have handled your banking accounts. It provides data of banking irregularities such as unsatisfied balances, fraudulent check deposits and other suspicious account handling. Most banks would deny your checking account application once you have a data in the ChexSystems. However, ChexSystem is not regulated service. If you have been denied due to a ChexSystem report, you may check your report for irregularities, contact the banks that have reported you and request to change the irregularities.
· Try a credit union – Credit unions are cooperative financial institutions that give low interest loans to its members. These unions are do not more likely look at your credit reports and are more than willing to help those who are in financial distress instead.
· Join Checking Account Classes – Credit unions may also offer checking account classes for those who have poor credits. Attending these classes increases your chance of obtaining a checking account. Very important to consider though is that these classes are not free may charge upto $60 per couple.
· Open a savings account – If you are continually rejected for a checking account due to bad credit, opening a savings account with the bank is a good option. Your savings account may act as a checking account. Once you are established to be a good customer, you may reach to a compromise with the bank to open up a checking account.
It is inevitable that your credit rating will always be looked upon when opening a checking account. Therefore, before anything else and as a first step, it is important to be honest with your bank, explain that you want to open a checking account but you have a bad credit. If good faith would play on you, maybe your bank would give you a chance and allow you to open a checking account. Also, approach banks that accept applicants with bad credit; the internet may provide information regarding their bank policies and may allow you to apply online. So, do you need a checking account but you have bad credit? Worry no more; there are always options available for you.
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