Banks and credit unions are able to check your history against the records maintained by ChexSystems, TeleCheck, and EWS. If you are listed in any of these databases, you may be turned down for an account.
Being as these records are maintained for a period of five years, waiting for your entries to be cleared is not an option. You need a banking solution, and you need it now.
Thankfully, there are banks and credit unions out there willing to give a second chance to customers listed in ChexSystems, TeleCheck, and EWS.
The accounts that they offer to customers listed in these databases are referred to as “second chance” bank accounts.
Best Second Chance Checking Accounts for 2020
Below is a list of our top recommended checking accounts for people looking for a fresh start. These are the accounts with the lowest fees, great features and benefits, and highest approval rates.
BBVA’s free checking option is available in all states except Alaska and Hawaii. They are very lenient with who they accept and provide some great benefits not found with other banks on our list. However, they do utilize EWS.
This account comes with a free Visa® Debit Card that lets you make purchases nearly anywhere. In addition, you’ll get access to a network of BBVA and Allpoint ATMs.
Features and Benefits
- Opening deposit just $25.
- No monthly service charge.
- Over 64,000 ATM's available nationwide with no ATM fees.
- Full online and mobile banking suite with their BBVA Wallet smartphone app.
- Free mobile and online bill pay and unlimited check writing.
Is BBVA Free Checking Right For You?
This account is our most recommended option for anyone living in the 48 states where BBVA is available.
Chime offers an award-winning mobile bank account with no overdraft fees, monthly maintenance fees, minimum balance requirements, or foreign transaction fees. Basically zero fees period.
Get can your paycheck up to 2 days earlier with direct deposit than you would with a traditional financial institution.
On top of that, you get a Spending Account and a Savings Account along with a Visa® Debit card and access to over 38,000 surcharge fee-free MoneyPass® and Visa Plus Alliance ATMs.
Features and Benefits
- No monthly fees
- Automatic round-up savings to help you stash your cash
- Top-of-the-line mobile banking capabilities
- Expedited direct deposit up to two days early
Is Chime Right For You?
Chime is best for people who don’t need access to physical bank locations and who want to take advantage of this online-only bank’s low fees.
Acorns Spend is an online checking account, and it automatically syncs with your Acorns Invest and Later accounts. When you sign up for Acorns Spend, you’ll receive a free Visa debit card.
And for every purchase you make on your debit card, Acorns will round up the purchase and invest this money for you. That means your roundups are invested seamlessly in real-time.
Features and Benefits
- Unlimited ATM reimbursements
- No minimum balance requirements
- No foreign transaction fees
- Send or deposit checks digitally
- Mobile banking options
Is Acorns Spend right for you?
An Acorns Spend account does come with a $3 monthly fee. But the company offers unlimited ATM reimbursements, which means you stand to gain a lot more than $3 per month. It’s a good option for anyone who already uses and enjoys Acorns products.
PNC is not available in every state, but it has a significant presence throughout the US, particularly in the Midwest and on the East Coast. Many customers are unaware that they offer second chance banking through a program called Foundation Checking.
Pay your bills, set savings goals, and track your spending with their free online banking tools.
Availability: Alabama, Delaware, the District of Columbia, Florida, Georgia, Kentucky, Indiana, Illinois, Maryland, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, and Wisconsin.
Features and Benefits
- No minimum balance required.
- Free transactions at approximately 9,000 ATMs.
- Improve your financial skills through PNC's courses (required).
- Upgrade to a standard account after 6-18 months.
Is PNC Foundation Checking Right For You?
PNC may be a great option if you are looking for additional education and support as you start back up with banking. You also should consider them if you have an account that may regularly dip below the $25 balance threshold requirement that is typical at other banks.
If Wells Fargo declines you for a standard checking account, you may still qualify for their “Opportunity Checking” checking account.
Features and Benefits
- Opening deposit of $25.
- Online bill pay and mobile banking suite included.
- Use over 13,000 ATMs free of charge.
- Additional features include account alerts, 24/7 fraud monitoring, and zero liability protection for your debit card.
Is Opportunity Checking Right For You?
Opportunity Checking may be a good fit for you if you are keen on having an account at a big bank but your banking record disqualifies you from getting a regular account.
This bank has over 700 branches throughout 17 states, including Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.
Features and Benefits
- $25 minimum deposit plus $9 setup fee
- Monthly maintenance fee as low as $9.95 with direct deposit set up
- No ATM fees at Woodforest ATMs
- Flexible overdraft options
Is Woodforest right for you?
Since there are fees for this account, it is not our top recommended choice, but it may be a suitable option if you are located in a state where the bank operates and are unable to qualify for a more affordable option.
What are ChexSystems, TeleCheck, and EWS?
ChexSystems, TeleCheck, and EWS are consumer reporting agencies that monitor and report the history of hundreds of millions of consumers. Those who are flagged by these agencies have records in their databases. ChexSystems is the largest of the lot. Over 9,000 banks across the country rely on it.
Banks run your name through one or more of these databases when you apply for an account. If they pull up a record, you probably will not be able to open an account.
A wide range of offenses can get you listed in ChexSystems, TeleCheck, or EWS. Here are some examples:
- Unpaid overdraft fees (probably the most common reason to be listed)
- Abuse of your debit card
- Non-sufficient funds losses
- Various forms of check-related fraud
- Failure to pay other fees or service charges
- Sometimes the offense is simply listed as “Undisclosed”
Thinking back, you may be able to figure out exactly what got you listed. But in many cases, the incident may have been so small that you have forgotten about it—or never even been aware of it in the first place.
What is second chance banking?
If you are listed in ChexSystems, you will be hard-pressed to find a bank or credit union willing to consider you. There are options available, it’s just that only a minority of financial institutions are willing to ignore your negative checking history.
Earlier I mentioned that over 9,000 banks in the US screen applicants through ChexSystems. In all, that adds up to over 100,000 branches. It also accounts for 80% of banking institutions in the country.
If you pick a financial institution at random and try to open a new account there, you only have a 2 in 10 chance of success.
Actually, your chances are probably even slimmer than that. Why? Because if you happen to be listed in TeleCheck and/or EWS as well, that too can raise a red flag on your name. A bank that does not pull your ChexSystems report may still run a TeleCheck or EWS check and end up turning you down anyway.
Obviously, you can waste quite a bit of time doing this, and get steadily more discouraged by rejection after rejection.
It is best not to put yourself through that—and you do not have to. Instead, you can open a second chance bank account.
What is a second chance bank account?
Second chance checking and savings accounts are offered by financial institutions that are willing to give you a second chance to prove that you are a trustworthy, reliable banking customer.
Banks that offer second chance banking do so in full knowledge of your ChexSystems, TeleCheck or EWS record.
Based on the information they see on your file, there is a possibility that you will still be denied (if, for example, you committed repeated counts of check fraud, most banks will not want to risk dealing with you).
In most cases, however, approval is likely. These banks know that sometimes good customers can go through lapses in judgment. They are willing to take a risk on you despite your past banking issues or bad credit.
So while banks that use ChexSystems may reject you for overdraft fees that didn’t get paid or non-sufficient funds loss, second chance banks are willing to overlook these kinds of offenses and offer you an account.
In fact, approval rates for second chance checking and savings accounts are very high, and most banks process customer applications very quickly. Features offered by these banks are comparable to those of a regular account. If you apply for an account today, you could be banking again in no time. This is the simplest and fastest way you can start raising your credit score right now.
Second Chance Checking vs Non-ChexSystems Checking
Aren’t they basically the same?
Not quite. But, it really depends on how specific you want to get. They serve the same purpose, but technically “second chance” and “non-ChexSystems” account are two different things.
- When you apply for a non-ChexSystems checking account, your ChexSystems report is not screened.
- When you apply for a second chance checking account, your report usually is still checked.
- The other big difference is that second chance banking may come with some additional limitations or strings attached. The institution may require that you enroll in a course that teaches personal finance in order to open a new account.
That being said, a lot of the time, the two terms are used interchangeably.
All in all, both of these types of accounts have a lot more in common than otherwise. This is the reason why they tend to be grouped together, despite their differences.
Searching for a comprehensive list of the top banks without ChexSystems? Take a look at our in-depth non-ChexSystems banking guide.
Best Alternatives to Second Chance Checking for 2020
If for whatever reason you still do not qualify for an account, what can you do?
As mentioned previously, we do have a detailed page on non-ChexSystems bank accounts. Some of the banks we recommend in that guide that do not use ChexSystems at all may fit your needs.
Second chance and non-ChexSystems accounts really are the most convenient options. They are easy to get started with and provide you with the best features.
If you cannot get approved for whatever reason, however, or you simply are looking for alternatives, here are some additional possibilities:
- E-wallets – PayPal and similar services sometimes offer debit cards to select customers.
- Secured credit cards – This type of credit card requires you to have a refundable security deposit. Your credit limit will be equal to your security deposit.
- Foreign bank account – If you live close to the border or travel often, see if a foreign bank will allow you to open an account.
- Prepaid debit cards – A prepaid debit card is much like a credit card. Fees on prepaid cards have come down, and some of them include a surprisingly large range of benefits.
- Money market accounts (brokerages) – If you can swing a large balance requirement, this is another option that may work out.
Of all of these alternative options, the two best are prepaid debit cards and money market accounts.
Best Banking Practices Going Forward
After 6 months to a year with a second chance account, there is a good chance that you will be able to upgrade to a regular checking account at the same institution.
Hopefully, from that point onward, you will maintain a clean banking record. But how can you make sure you do not end up in ChexSystems, EWS or TeleCheck again?
Anyone (including your bank or credit union) can make a mistake, so there is no surefire way to guarantee that you will not run into this issue in the future. But the following tips can minimize your chances of another mishap.
- Check your account balance on a regular basis. Make it a habit.
- Set up overdraft protection.
- Set up alerts for when your balance falls under a certain threshold.
- Set up alerts for large payments and transfers.
- Review your budget at least once a month. Figure out where all your money is going. Cut back on any unnecessary expenses. Consolidate debts and take other steps as needed to simplify your finances and reduce what you owe.
- Understand the terms governing account balance, fees, and so on to the letter.
- Make sure that you never allow your account to dip below the minimum threshold.
- If you do incur a fee, either pay it that day or ask customer support to retract it. This is not always easy. It depends on the bank or credit union, the branch, how long you have been a customer, who is working that day, and how busy they are.
- If you can set up direct deposit, do so.
- It should go without say, but you need to follow the rules. Do not try to bend or break them in any way. Even if you are desperate, it is never worth it.
- If an issue does come up, contact customer service immediately and work with an agent for a swift resolution.
If you follow smart banking practices like those described above, you can protect your banking record. Ultimately, this will help you keep fees and daily balance requirements to a minimum and increase your access to banking services.
Second Chance Banking FAQ
Q: Which is better, a ‘second chance’ or ‘non-ChexSystems’ bank?
A: Neither option is really “better.” The features and benefits of the two types of accounts are almost identical. Some second chance banks do insist that you take an educational course to help you better manage your finances, but many do not. Plus, while you may look at this as a detractor, it really is not; you may find the lessons useful.
Q: Is it easier to qualify for a non-ChexSystems checking account or a second chance checking account?
A: You might think it’s easier to qualify when ChexSystems isn’t run at all, but this is not always the case. Sometimes a bank that does not look up your ChexSystems record may still find you in EWS or TeleCheck.
With a second chance account, they have seen your record, but they have assessed the risk of numerous customers who are listed in ChexSystems and have decided that most applicants are still worth taking on.
So in some cases, you might have an easier time being approved by a bank that doesn’t look at ChexSystems, but in others, you might have an easier time being approved for a second chance account.
Q: Is second chance checking as good as standard checking?
Q: How does one apply for a fresh start checking account?
A: Getting started is easy! Just scroll up to our list of recommended second chance banks above or jump down below to select your location from our list. Select an account that offers the features you are looking for and click through to apply online in minutes.
When you are declined a standard checking account because of ChexSystems, TeleCheck or EWS, you may feel like the banking system has abandoned you.
But your situation is far from unique. Most customers with a less-than-perfect banking history have committed minor infractions, often involving only a few dollars.
While it may not be as convenient, there are still some banks that recognize how absurd it is to decline reliable customers simply because of an insignificant incident in their past.
Why go another day without banking when you don’t have to? It is time to start building a solid record again with an institution that recognizes your value as a customer!
Second Chance Banks & Credit Unions by State
Looking for more information and additional options available in your area? Select your state from the list below to find out all your options for banking.
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- District of Columbia
- West Virginia