If you have a history of bad credit or a low credit score, you might find it difficult to open a checking account. However, many banks have accounts that are designed for people with a poor credit history. By finding the right account, you can access useful features and improve your credit rating. In fact, opening a checking account could be a critical step in improving your credit score. To get started, take a look at these top 10 best checking accounts for bad credit:
Top 10 Checking Accounts for People with Bad Credit
BBVA, or Banco Bilbao Vizcaya Argentaria, is one of the most well-known banks in North America. With headquarters in Spain, you’ll find BBVA branches located in numerous states and customers also have access to online banking facilities.
For people with bad credit, the BBVA Second Chance Checking Account is a great option. You’ll get access to full banking services and there are minimal account requirements, so you won’t have to worry about a poor credit score holding you back.
However, you will have to pay an account fee if you open a Second Chance Checking Account with BBVA. Currently, this is $13.95 per month for the first year. Following this, you could be eligible to open a full BBVA checking account. It’s also worth noting that you could be charged if your account has insufficient funds or deposits are returned.
Operated by Green Dot Bank, GoBank is a mobile banking service that’s ideal for people who want to bank online. They don’t have physical branches, so you can’t manage your account face-to-face, but their online banking features are extensive.
What’s more – you won’t be subject to credit checks when you apply for a GoBank online checking account. Although GoBank doesn’t have physical branches, you will have access to numerous free-to-use ATMs. In addition to this, you can make in-person deposits for $4.95 at a number of locations, including Walgreens, 7-11, CVS, Kroger, Rite-Aid, Ralphs, Family Dollar, Dollar General and Speedway, so it’s a convenient way for people with bad credit to access the features and services they need.
An online checking account with GoBank will cost you $8.95 in account fees per month but this is waived if you deposit at least $500 into your account every month.
3. Bank of America
If you want to open a checking account for bad credit with a major bank, then Bank of America could be your first choice. Their SafeBalance Banking® Account is designed for people who want to rebuild their credit score, which makes it ideal for anyone with a lower-than-average credit rating.
You won’t be able to write physical checks with this account, but you will benefit from a range of other features. What’s more – Bank of America makes it easy to manage your finances as any transactions will automatically be declined if you don’t have the funds available in your account.
4. Wells Fargo
When you open a Clear Access Banking account with Wells Fargo, you’ll get access to a wide range of banking features, and you won’t need to worry about being declined due to bad credit. The Clear Access Banking account is designed for people with a poor credit history, which makes it an effective way to improve your credit rating.
Like many checking accounts for bad credit, you won’t have access to an overdraft with this account, so you won’t have to worry about being charged overdraft fees either. Similarly, you won’t be able to write physical checks, but you will have the opportunity to upgrade to a regular checking account after 12 months.
5. First American Bank
First American Bank is well-known in Wisconsin, Illinois and Florida but you might not be familiar with the brand if you live elsewhere. However, they offer online banking throughout the country, so everyone can benefit from their Fresh Start Checking Account.
Unlike many of the accounts aimed at people with bad credit, the Fresh Start Checking Account allows you limitless check writing, so, if being able to write physical checks is important to you, this might be the right account.
6. Radius Bank
With impressive online tools and a Financial Dashboard, Radius Bank is a great option for people who want a tech savvy account that they can operate from anywhere. Their Essential Checking account is suitable for people with a poor credit score, and you’ll get access to a range of handy features, as well as the option to upgrade to their Rewards Checking account after a 12-month period.
7. Fifth Third Bank
If you need a basic account and you have a low credit score, the Express Banking account from Fifth Third Bank could be just what you’re looking for. It doesn’t offer the same level of features as some other checking accounts for bad credit, but it certainly provides you with sufficient resources for day-to-day banking and gives you the opportunity to improve your credit score.
In addition to this, there is no monthly account fee to pay, and no minimum deposit required, so you can open an Express Banking account straight away.
8. Aspire Federal Credit Union
If you’ve been turned down for other accounts due to bad credit, the Fresh Start Checking Account from Aspire Federal Credit Union could give you the platform you need to get back on your feet. However, you will need to have your paycheck deposited into the account on a monthly basis to be eligible to open a Fresh Start Checking Account. In addition to this, new applicants are typically required to make a donation to one of the Credit Union’s appointed non-profit organizations.
As a fully online bank, Chime makes it easy for people with bad credit to open and manage an account without visiting a branch. Instead, you can improve your credit rating by managing your account completely online.
If you’re concerned about signing up with an online-only bank, there’s no need to be. Chime is FDIC-insured and they have a wealth of top reviews from existing customers. What’s more – you won’t have to pay a monthly account fee or deposit a minimum amount to open an account.
10. Axos Bank
Axos Bank has a limited number of physical branches in California, but they operate as an online-only bank throughout the rest of the U.S. They’ve been around since 2000, so they’re a brand you can trust and are well-known in the industry.
For people with bad credit, their Second Chance Checking account is an easy way to access the banking services you need. If you want to start putting some funds away for a rainy day, you’ll be pleased to know that Axos Bank also offers a Second Chance Savings account to accompany their checking account.
When you have a low credit score or a bad credit history, it can be difficult to access the financial services you need. As a result, people often end up using cashier’s checks and prepaid cards. However, these can be inconvenient, and they don’t help you to rebuild your credit score.
Fortunately, many banks realize how easy it is for people to develop a low credit score. Due to this, they are introducing accounts that are specifically designed for people with bad credit.
Checking accounts for people with bad credit may offer limited features compared to regular checking accounts and some do implement monthly account fees. Despite this, they do provide you with access to a wide range of banking features and are a viable way to start rebuilding your credit rating.
Opening a checking account for bad credit can give you the ability to improve your credit score, which could open the door to mortgages and bank loans in the future. In addition to this, it will give you the opportunity to establish good money management skills and implement a personal budget.
In today’s digital world, having an online account is practically essential, which is why checking accounts for bad credit are so important. When you can pay bills online, purchase goods and services online and transfer money via mobile banking, it’s far easier to stay in control of your funds.
If you’re worried about applying for a checking account due to bad credit, there’s no need to be. With these handy tips, you can simplify the process and increase the likelihood of your application being approved:
1. Verify the Account Requirements
Every bank has different requirements for their checking accounts, so confirm exactly what’s needed before you submit an application. If you’re concerned that a low credit score will hold you back, look for a bad credit checking account from a bank that doesn’t screen applications with ChexSystems.
2. Check Your Credit Report is Correct
Don’t simply accept that you have a bad credit score, particularly if you’re not sure why your credit rating is subpar. It is possible that errors have been made or incorrect entries have been applied to your credit file.
Everyone is entitled to a free copy of their ChexSystem report once per year, so make the most of the opportunity to view your credit status. Then, you can apply to have any errors rectified, which could increase your credit rating.
3. Look for A ‘Second Chance’ Account
Many banks have now launched ‘Second Chance’ accounts, which are most suited to people with poor credit histories. Although there is often a small monthly account fee, it can be well worth it to gain access to a checking account. As these accounts are purposely created for people with bad credit, you should find it relatively easy to open an account.
4. Try a Prepaid Debit Card
If you haven’t found a bad credit checking account that’s right for you, consider using a prepaid debit card in the interim. Simply add funds to the card and you’ll be able to use it like a standard debit card, but you won’t have to undergo a credit check.
However, do be aware that many prepaid debit cards come with hidden charges, so make sure you know exactly what fees you’ll encounter before you begin using your card. You won’t have access to the same features that a checking account offers but it can be a viable short-term solution.
If you’re thinking of opening a bad credit checking account, you’ll want to ensure that you find the best account for you. However, not all ‘second chance’ checking accounts are the same, so it’s worth shopping around and comparing what different banks can offer. To get started, take a look at what to look out for when you’re comparing checking accounts for bad credit:
Some banks charge a monthly account fee for checking accounts aimed at people with bad credit. However, not every bank imposes these types of fees, so you may be able to avoid them. In addition to this, some banks will waive their monthly account fee if you deposit a minimum amount into your account each month or if your balance stays above a particular amount.
There are two things to bear in mind when it comes to the minimum balance requirements of a bad credit checking account: Firstly, you may need to make an initial deposit to open an account and, secondly, you may be expected to maintain a minimum balance for as long as the account remains open.
If a checking account has a minimal opening deposit of $50, for example, the bank may also insist that your balance remains above $50 at all times. Before you open a checking account for bad credit, check whether there is an initial minimum deposit requirement and whether you’ll need to meet an on-going minimum balance requirement.
Banking Features and Services
A checking account for bad credit may not offer the same features as a full-service, regular checking account, but this doesn’t mean that you won’t get access to a wide range of features. Again, this can vary from one bank to another, so you’ll need to compare the various options and decide which features are most important to you, such as:
- Access to free-to-use ATMs
- Ability to write physical checks
- Debit card
- Mobile deposits
- Local, physical branches
- Online banking and mobile apps
- Overdraft facilities
Remember – just because a feature is available, it doesn’t mean that it will be free of charge. Before you open an account, confirm which features and services are available free, and which require an additional payment.
Having bad credit can hold you back in many ways but it shouldn’t stop you accessing banking services. If you’ve been turned down for a checking account in the past or you’re worried that a low credit score will prevent you from opening an account, a checking account for bad credit could be the right option for you.
Opening a bad credit checking account means you’ll no longer have to rely on cashier’s checks and prepaid debit cards, which means paying your bills and making everyday transactions gets a whole lot easier.
In addition to this, a checking account for bad credit allows you to take the first step to rebuilding your credit rating and gets you a little closer to being eligible to open a regular checking account in the future.
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