When working on credit repair, re-establishing a checking account is an important step. A checking account is used as a basic measure of credit-worthiness. Plus, many creditors will insist on directly debiting payments while you are settling old debts, which means you’ll need the account.
If you’ve bounced checks, overdrawn accounts, or closed a checking account with a negative balance, you may get turned down when you try to open a new account. Most banks use a verification system called ChexSystems that keeps track of past negative records. But, even if you have been listed in ChexSystems, it can still be possible to open a new account.
How to Get a Bank Account When You’re Listed on ChekSystems
One of the first and most important things you can do is make sure that your ChexSystems report is accurate. Challenge any inaccurate or unfair records. Then, work toward fixing any legitimate negative marks like overdrafts. You are entitled to one copy of your report free each year.
Find a Financial Readiness Class
In many areas, there are community-based programs that can help you get a new account. Bank On is a non-profit with locations in several states that help people who are unbanked get accounts. They offer classes that many banks will accept as proof that you are ready for a second chance. Another course, CheckWi$e, provides a certification after you have completed their six-part financial readiness course.
Apply for a Second-Chance Account
There are a number of banks that offer these accounts. Most will come with higher fees and more restrictions on the account. PNC, for instance, offers a second-chance account with a $5 a month fee and a $100 daily withdrawal limit. Ask at the bank how long it will take to graduate to a regular checking account.
During the rehabilitation period, you’ll have to be very conscious of your balance and be sure not to overdraw the account. To keep track of funds, opt for a checkbook that automatically creates copies so you don’t forget a check. Write down all debit transactions and compare them daily with your bank’s online records.
Finding a Bank That Does Not Use ChexSystems
This is an alternative if you cannot find any of the resources above in your local area. It can be difficult to find them, but, there are banks that do not use ChexSystems to determine account worthiness. Ask local friends if they’ve successfully opened accounts with negative marks in their past and also research online.
It may also be possible for you to wait for negative items to expire from your ChexSystems report. Items stay on your report for five years. This is only advisable if you are close to the time limit. Going without a checking account means putting off big dreams like a home purchase and dealing with daily inconveniences like prepaid debit fees.
It can take some patience, discipline and effort, but, going through the necessary steps to regain a checking account is the first step in rebuilding your credit and expanding the range of opportunities for your future.