Negative credit history makes obtaining loans, jobs and even checking accounts difficult. To find a bad credit bank account, there are some steps individuals can take to improve their FICO scores and be taken seriously on loan applications.
Credit Repair
To begin, obtain copies of personal credit reports from the three major agencies. These are Experian, Equifax, and Transunion, but it is easier to go to a website which conveniently provides all three for one discounted price. The report needs to be analyzed for incorrect line items or debts which should have been discharged and removed from the record. If there are still discharged accounts showing, write letters to all three agencies requesting they be removed.
Eliminate any outstanding balances, or begin paying them on time. This stops the creditor from noting late or delinquent payments on reports. When all credit lines are being paid on time, a person’s FICO score can increase dramatically in as little as three months.
Another document worth having is from ‘ChexSystems.’ This is the company banks go to if they are not in the habit of obtaining credit reports. Through this company they can learn about any negative history documented with previous accounts, and if there are debts still outstanding at a banking institution.
If there are negative balances with previously used banks, clear the debt before applying to another one. Accounts cleared within the institution’s grace period may be eligible for re-opening with stipulations. If not, there are other services the individual can use.
Savings and Money Market
A person looking for a way to manage their money, without the need for checking services, can open a savings or money market account. Particularly with the widespread use of online banking, a savings has as many features as checking. Direct deposit and debit cards are two features common when saving with a bank.
For people with enough available funds, money market accounts are another consideration. Features often include a limited use of checks and interest is sometimes higher than average. Large minimum balances are commonly required to open one.
A credit union has relaxed requirements and may be easier to deposit money with. Each institution has unique rules and regulations, operating in accordance with the area of their charter status, and is run by and for members. Manage accounts at a credit union well to avoid having them closed.
Besides money market deposits, broker’s investment vehicles do not usually require a credit check, but the minimum start-up balance begins at $1,000, and can be as much as $2,500. With 24 hour online access, funds can be deposited directly, and depending on the investment, may have some liquidity.
Best Solution
People having trouble opening a checking and/or savings service at a traditional bank will have multiple options once their credit and banking problems are addressed. If money is owed at a previous financial institution, inquire whether they will allow further banking when it is paid. As with contacting major reporting agencies when fixing credit, it is wise to contact ChexSystems and order a copy of your report
Looking for Something? Search here:
(examples: auto, banking, college, credit cards, debt, frugality, insurance, investing, loans etc.)
