Banking With Bad Credit

Many people think that they will not be able to get a checking or savings account at a bank again because they have a bad credit record. Nothing could be further from the truth, there are a number of banking options for people with bad credit records.

Find a Bank That Doesn’t Do a Credit Check

The best option people with bad credit have to open a bank account is to find a bank that doesn’t run credit checks. There are a number of banks out there that will open checking accounts for any person who has a steady source of income such as a job or a regular government benefit check.

These banks will open accounts for such people as long as they agree to sign up for direct deposit. Direct deposit means that a person’s salary, pension or government benefit is electronically paid right into the bank account. The advantage to direct deposit is that a person doesn’t have to go to all the trouble of making deposits with a paper check. The disadvantage to direct deposit is that the bank will be able to immediately use the money to cover any outstanding checks or payments. This means that a person won’t have the option of cashing the paycheck and keeping part of his pay before going to the bank.

How to Find a Bank that Doesn’t Do Credit Checks

Locating a bank that doesn’t do credit checks on people who open new accounts can be difficult. All of the big corporate banks such as Chase, US Bank and Bank of America do such credit checks on new customers.

Smaller locally owned banks are a good option, especially community banks in small towns and community owned banks. These banks may not do a credit check or work with a person with bad credit who has a good reputation in the community.

Another alternative is a credit unions, some credit unions will work with people who have bad credit. Many credit unions are locally owned and operated so they may not be as stringent as larger banks.

There are a couple of national banking chains that serve people who have bad credit. Academy Banks which are located in many Wal-Mart stores will give anybody who has a job a checking account. The customer service is a little poor but they will work with those who have bad credit. TCF banks will work with those with bad credit but they are quick to tack on overdraft and other fees. One advantage to TCF is that they will let those who have accounts that have been closed open new accounts in the future if they pay off the closed accounts.

Bank Where You Work

Another option for people with bad credit records is to see if your employer or your credit union has a special arrangement with a bank or credit union. Many big corporations have arrangements with big banks like Chase or US Bank for their employers. Some of these banks will waive requirements for those employed with a big company that does business with the bank. Check with your company’s HR department or check your company’s website or corporate intranet to see if such nets are available.

Many government agencies and some corporations particularly utilities have credit unions specifically for their employees. These credit unions might waive a credit check requirement for a good employment.

If you’re a member of a union, check and see if the union has a credit union. A credit union associated with the union may also waive a credit check requirement for a dues paying union member.

There is no reason for individuals with bad credit not to have a bank account.