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Best Bank Accounts For Bad Credit Of September 2024
Updated: Aug 30, 2024, 1:04pm
If you’re worried about your banking history, don’t rush to open a new account. Do some research before you apply, and look for second-chance bank accounts that will give you a fair shot at being approved. This list of the five best bank accounts for bad credit is a good place to start.
Best Bank Accounts for Bad Credit in September 2024
Many financial institutions, including traditional banks, online banks and credit unions, offer accounts with flexible requirements for folks who’ve had money trouble in the past. Namely, they don’t use ChexSystems to screen your banking history.
The best bank accounts for bad credit are easier to open than most because they don’t use ChexSystems, and they offer a combination of low fees and practical features for saving and accessing your money. We compared the most widely available accounts that met our criteria to come up with this list of the top bank accounts for bad credit.
Annual percentage yields (APYs), account details and fees are accurate as of August 30, 2024.
Summary Of Best Bank Accounts for Bad Credit Of 2024
What Is a Second Chance Bank Account?
Bank accounts for bad credit are designed for people who need a fresh start. Often referred to as second-chance bank accounts, these come with many of the same features as traditional checking accounts but are more lenient toward negative marks or don’t use ChexSystems—an agency that monitors consumer banking histories—to screen applications. While ChexSystems doesn’t include your credit history in your file, poor credit and poor banking histories often go hand in hand.
Can You Open a Bank Account With Bad Credit?
You can open a bank account if you’ve made banking mistakes or have bad credit, but you may need to look for accounts that won’t use ChexSystems if you’re worried about your banking history.
Your ChexSystems report provides a snapshot of your banking history—including negative activities like involuntary account closures, unpaid fees and overdrafts—as well as a summary of times you’ve applied for new accounts. You might not have a ChexSystems file at all if you’ve always kept your accounts in good standing, but you will likely have a report if you’ve ever misused bank accounts.
Banks don’t check your credit when you apply for a checking or savings account, but they often check your banking history with ChexSystems. And while ChexSystems doesn’t report on credit, banking and credit histories can tell similar stories about your finances. Just as a bad credit score can indicate problems with debt, a poor ChexSystems file may indicate trouble using bank accounts responsibly. But this doesn’t mean you’re stuck if you need a new account.
How To Get a Bank Account With Bad Credit
Getting a bank account with bad credit is a two-step process.
First, find a bank account that fits your needs. Online banks can be better for bad credit and second chance banking not only because they typically charge fewer fees and have lower minimums than traditional banks but also because many don’t use ChexSystems to screen applicants. Consider the accounts on this list, which have been selected for people with negative banking histories.
Next, apply to open the bank account you’ve chosen by providing the following personal information:
- Your full name
- Date of birth
- Mailing address and email address
- Phone number
- Government-issued ID
- Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
Once approved, you can fund your account. You may be able to deposit money with an electronic transfer, check or cash deposit.
Tips for Improving Your Credit Score
Fixing your credit score and building a positive credit history can make many aspects of your life easier. When it’s time to apply for a loan or credit card, take out insurance or rent an apartment, for example, good credit may help you secure better rates and more favorable borrowing terms.
Here are a few tips for improving your credit score:
- Pay your bills on time or early each month.
- Check your credit score and credit report and report any errors you find.
- Work on paying down large loans and credit card balances.
- Use only as much credit as you need.
- Limit new accounts and hard credit inquiries.
If you’re trying to rebuild credit, consider a secured credit card. These require cash deposits to open and establish a credit limit, and they can help you build your credit history safely over time.
Methodology
To create this list, Forbes Advisor analyzed 14 checking account offerings at a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each account on 16 data points within the categories of fees, access, customer experience, digital experience, minimums and whether or not the account considers an applicant’s ChexSystems banking file.
These categories were assigned the following weightings:
- ChexSystems: 30%
- Fees: 29%
- Minimum deposit requirement: 10%
- Access: 9%
- Customer experience: 9%
- Digital experience: 8%
- Minimum balance requirement to avoid monthly fee: 5%
Only accounts that are reported to not consider ChexSystems were included. Accounts with no or low fees and minimums rose to the top, as did those with higher customer service and mobile app ratings. Branch access was considered, but accounts at online-only banks ranked above those at brick-and-mortar institutions if they offered better perks and lower fees. To appear on this list, the checking account must be nationally available.
Find The Best High-Yield Savings Accounts Of 2024
*Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. The secured Credit Builder card issued by Stride Bank, N.A.
¹Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
²Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
³Out of network ATM withdrawal and over the counter advance fees may apply. See here for details.
⁴Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
Next Ups In Checking
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.