One of the financial realities of our society is that your consumer habits are of interest to just about anyone you do business with. Insurers and cell phone providers want to see that you have good credit. Banks want to know that you aren’t in the habit of bouncing checks. As a result of financial institutions’ interest in your habits, it’s becoming more common for some banks to deny you the ability to open a checking account based on your credit, or on your ChexSystems report.
Looking Into Your Financial Habits
You might think that your financial habits wouldn’t matter as much if you are trying to open a checking account. After all, you aren’t borrowing money. However, many financial institutions no longer want to deal with consumers that require an increase in costs associated with account administration. As a result, they are looking into your habits.
Some banks and credit unions won’t open a checking account for you if you have poor credit. Others want to see if you have a ChexSystems report before allowing you to open an account. If you have a ChexSystems report, it means that you have overdrawn your account, or bounced a check, or engaged in some other negative behavior that your financial institution has reported. Some banks will be a little more lenient, still approving you if you have only an item or two reported in ChexSystems (these items remain on record for five years). Others, though, will deny you outright for any infraction.
Second Chance Checking Accounts
If you have poor credit, or if a ChexSystems report is making it difficult for you to open a checking account, you still have options. Some financial institutions will still let you open an account even with a ChexSystems report, or if you have poor credit, but you have to be prepared to deal with an inferior product. Some banks may steer you toward a checking account with a monthly fee, or with a minimum balance requirement, if you have had problems in the past.
These second chance checking accounts can help you re-establish good banking habits and relationships, but you will have to be willing to pay the price for a period of time until your credit score improves, or until five years has passed since your last ChexSystems report. Once that has happened, you can apply for a better account.
Financial Institutions that Don’t Use ChexSystems
You can also improve your ability to get a better checking account product by looking for a bank that doesn’t use ChexSystems. There are lists of banks and credit unions that won’t look at your ChexSystems report first. You can also call the financial institution to find out whether or not they use ChexSystems, or check your credit report. Many online banks can help you in this regard, while making it simple to open a checking account.
If you are willing to take the time to shop around, you can usually find a checking account that works for you. However, in some cases, you might have to settle until your past financial mistakes can be cleared up.