A checking account makes it easier to manage your finances. Here’s what to do if you are denied by a bank.
A bank account is one of the first rites of passage into adulthood. You need a bank account to transfer and receive money electronically. You also need a bank account to get approved for many types of loans. While obtaining a bank account is easier than getting approved for credit or a loan, a bank can still reject your application for an account based on your bad credit history. Here is what to do if you receive a rejection letter from the bank.
1. Find out why you were rejected.
If you receive a rejection notice from the bank, there is something negative in your credit history. A bank could reject your application for a checking account if you have on of the following negative marks on your credit report:
- Unpaid fees
- Bounced checks
- Too many credit inquiries
- Too many checks ordered
- Check fraud
- Identity theft/fraud
- Unpaid negative balances
- Excessive withdrawals
It’s important to understand why you were rejected, so that you can identify if the reason is legitimate and not an error and begin to take actions to correct any issues. If you think you were wrongfully rejected or have fixed any of the issues listed above, you could ask your bank to reconsider. Federal law requires banks to disclose rejection reasons.
2. Request a copy of your report.
If your bank won’t reconsider your application for a bank account, ask them for a copy of your ChexSystems or Early Warning Services report. These are the two types of reports banks use to qualify applicants. To request a copy of your report, you need to provide your address, social security number and addresses of all residences you have lived in over the past five years. It will take about five business days to receive the report in the mail.
3. Check for errors in your report.
Once your report arrives, make sure to review it for errors. You could be the victim of an error or fraud. If you find any errors, you can dispute them with either ChexSystems or Early Warning Services as well as with your bank or credit union. Your report can also help you identify debts you owe that you might have forgotten about. You will need to pay these off, before they can be removed from your report.
4. Get a “second chance” account.
There are banks that are willing to offer customers a second chance. You could qualify for a second chance bank account with poor credit or poor banking history. While these banks won’t base qualifying decisions on your consumer report, they tend to charge higher fees.
5. Use a prepaid debit card.
If you need a way to manage your money and can’t qualify for a bank account, you could apply for a prepaid debit card. These cards must be pre-loaded with cash. Prepaid debit cards also typically have minimums. You can use your prepaid debit card for bill-paying and transferring funds to other people.
To get approved for personal loan funding, you will need to provide online lenders with your bank account. If you can’t open a bank account today, follow the steps above to remove negative marks from your report.
This post is not intended to be a solicitation for a loan. BrighterPays provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.