How to Open a Bank Account with Bad Credit


Opening a bank account can be a challenging process, especially if you have a negative banking history. However, it’s important to understand that most banks don’t check your credit score when you apply for a bank account, as they do with credit cards and loans.

In most cases, having bad credit doesn’t matter when it comes to opening a bank account. Instead of checking your credit history, banks and credit unions utilize a system known as ChexSystems to access your banking history. So, even if you have bad credit, you can still open a bank account.

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What is ChexSystems, and how does it differ from Equifax, Experian, and TransUnion?

If you were turned down for a checking or savings account, it’s highly unlikely that a poor credit score was the reason behind the denial. It’s more likely that your name appeared in ChexSystems.

When it comes to managing your finances and credit history, you’re likely familiar with the big three credit bureaus: Equifax, Experian, and TransUnion. These companies gather information about your credit history, payment history, and other financial information to compile your credit report. However, there’s another player in the game that you might not have heard of: ChexSystems.

ChexSystems is a consumer reporting agency that specializes in collecting and reporting information related to checking and savings accounts. In contrast to credit bureaus such as Equifax, Experian, and TransUnion, which concentrate on credit histories and loan management, ChexSystems zeroes in on your banking behavior. This involves tracking your record of overdrafts, bounced checks, and any other negative banking activities.

How can I find out if I’m in ChexSystems?

If you’re wondering whether you’re in ChexSystems, the good news is that it’s easy to find out. ChexSystems is required by law to provide you with a free copy of your report once every 12 months, just like the three major credit bureaus. Here are a few steps you can take to get your report:

  • Request your report online: The easiest way to get your ChexSystems report is to visit their website and request it online. You’ll need to provide some personal information, like your name, address, and Social Security number, as well as some information about your banking history. Once you’ve submitted your request, you should receive a copy of your report in the mail within a few days.
  • Request your report by phone: If you prefer to request your report by phone, you can call ChexSystems at 1-800-428-9623. You’ll need to provide the same personal and banking information as you would online, and your report will be mailed to you.
  • Request your report by mail: If you prefer to request your report by mail, you’ll need to download and fill out a request form from the ChexSystems website. You’ll need to provide the same information as you would online or by phone, and mail the completed form to the address listed on the website. Your report will be mailed to you once your request is processed.

Once you’ve received your ChexSystems report, review it carefully for any errors or inaccuracies. If you find any mistakes, you can dispute them with ChexSystems and request that they be corrected.

What should I do if I’m in ChexSystems?

If you’ve discovered that you’re in ChexSystems, you have several options.

  1. Review your report: Once you’ve received your ChexSystems report, take the time to review it thoroughly for any errors or inaccuracies. If you spot any mistakes, dispute them with ChexSystems and request that they be corrected. This can help improve your overall banking history and increase the likelihood of opening new accounts in the future.
  2. Pay off any outstanding balances: Take steps to pay off any outstanding balances or negative items on your ChexSystems report. This may involve paying overdraft fees, settling disputes with your bank, or negotiating a payment plan with a collection agency.
  3. Open a second chance account: Consider opening a second checking chance account if you have been denied a bank account due to your ChexSystems history. These accounts are designed for people with a history of banking problems and typically have fewer fees and less strict requirements than traditional accounts.
  4. Choose a bank that doesn’t use ChexSystems: While more than 80% of banks and credit unions use ChexSystems, there are some excellent banks that do not. The banks that offer these accounts don’t conduct a credit check or look at your ChexSystems report.
  5. Get a prepaid debit card: Another alternative to a traditional bank account is a prepaid debit card. You can load money onto the card and use it like a regular debit card to make purchases or withdraw cash from an ATM.

What are the best banks that don’t use ChexSystems?

We’ve compiled an extensive list of banks that don’t use ChexSystems. You might be surprised to know that, unlike some second chance bank accounts, these bank accounts come with all the same features and benefits as a regular bank account.

Here are the top 3 checking accounts that don’t use ChexSystems:


LetMeBank’s rating
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Features & Benefits

  • Up to 5.21% APY on savings
  • Up to 2% cash back
  • No minimum balance requirement
  • No monthly fees or overdraft fees

Upgrade doesn’t pull your ChexSystems report, but they do look at your credit report.

The Upgrade Rewards Checking account has no monthly fees and no ATM fees. You’ll also get a free Visa debit card, and up to 2% cash back on everyday debit card purchases.

The Upgrade Premier Savings account delivers an impressive 5.21% APY, giving you a remarkable opportunity to grow your savings faster.

Upgrade is partnered with Cross River Bank, Member FDIC, and your funds are FDIC-insured up to $250,000. With an Upgrade checking account, you can also get up to 20% lower rates on Upgrade loans and credit cards.

First Tech Federal Credit Union

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Features & Benefits

  • Up to $300 sign-up bonus with direct deposit
  • No minimum balance requirements
  • Earn up to 5.00% APY
  • Over 30,000 fee-free ATMs

First Tech Federal Credit Union offers an attractive banking solution that goes beyond traditional constraints, providing members with a combination of high-yield interest and multiple financial incentives across its platforms.

With the First Tech Rewards Checking & Savings accounts, there are no minimum balance requirements and no monthly maintenance fees. Members can take advantage of a $300 bonus simply by establishing a qualifying payroll direct deposit of $1,000 or more per month for three consecutive months.

These accounts offer competitive interest rates, with the potential to earn up to 5.00% APY on both checking and savings accounts, depending on the balance—significantly higher than many conventional banks.

Additionally, First Tech offers extensive accessibility with over 30,000 CO-OP network ATMs nationwide for fee-free withdrawals.

The credit union also ensures enhanced financial security and flexibility with features like real-time fraud monitoring and free overdraft transfers, contributing to a comprehensive and secure banking experience.


LetMeBank’s rating
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Features & Benefits

  • Build credit just by using your debit card
  • No minimum balance or monthly fees
  • 40,000 fee-free Allpoint ATMs in the U.S.
  • Get paid up to 2 days faster
  • No credit check or ChexSystems

Current is a financial technology company, not a bank. The company does not use ChexSystems or pull your credit report, and they have a lot to offer.

With Current, your everyday purchases can now shape your financial future. Simply by swiping your debit card, you can build credit. No loans or credit checks needed. There are also no monthly or annual fees for this service.

A Current mobile bank account includes fee-free overdraft protection of up to $200. Account holders also get access to over 40,000 fee-free Allpoint ATMs with your Current debit card, and there is no minimum balance or hidden fees.

You can also get paid up to two days early with direct deposit with a Current Premium account. Plus, Current offers up to 4.00% APY with Current Savings Pods.

What are the benefits of opening a bank account?

Opening a bank account provides various advantages, even if you have a negative banking or bad credit score. These benefits include:

  • Secure place to store your money: Keeping your money in a bank account protects your funds from theft or loss.
  • Convenience: Accessing your money via a debit card or online banking is more convenient than carrying cash.
  • Easy bill pay: With a bank account, you can easily set up automatic bill payments and never miss a payment.
  • Interest on savings: Some bank accounts offer interest on your savings, which can lead to increased growth of your funds over time.
  • Direct deposit: By setting up direct deposit for your paychecks, you can save time and get faster access to your funds.

What documents do I need to open a bank account?

Opening a bank account requires specific documentation that varies based on the bank and account type. Typically, you will need to provide the following:

  • Government-issued ID: Such as a driver’s license, passport, or state ID.
  • Proof of address: This may include a utility bill, lease agreement, or other document that confirms your current address.
  • Social Security number: You’ll be asked to provide your social security number for tax purposes.
  • Initial deposit: Some financial institutions may require an initial deposit to open an account. The amount can differ, so it’s best to check with your bank.
  • Additional documentation: Depending on your circumstances, you may need to provide additional documentation like proof of income or citizenship.

How can I improve my banking history?

If you have a negative banking history, there are steps you can take to improve it:

  1. Settle your debts: If you have any negative items on your ChexSystems report, work to pay them off as soon as possible. This can make it easier to open new accounts in the future.
  2. Manage your checking account responsibly: It’s essential to open a new checking account and manage it responsibly. This involves making regular deposits, avoiding overdrafts, and paying your bills on time.
  3. Monitor your banking activity: Keep track of your banking activity and check your ChexSystems report regularly for errors or inaccuracies. Dispute any mistakes and work with your bank to resolve any issues.
  4. Seek professional help: If you’re struggling with managing your finances or have a lot of debt, consider seeking professional help from a financial advisor or credit counseling service. They can help you develop a plan to improve your financial situation.

How can I improve my credit score?

While most banks and credit unions typically don’t take your credit score into account when opening a bank account, there are a few that do consider it. However, your credit score holds immense importance for several other reasons. Therefore, it’s crucial to ensure that it’s in good standing.

To improve your credit score, you’ll need to put in some time and effort, but it’s certainly achievable. There are several ways to boost your credit score, including paying bills on time, which is essential to avoid negatively impacting your credit score.

Paying down debt is another effective strategy to improve your credit score, since high levels of debt can negatively affect it. Additionally, checking your credit report frequently for errors or inaccuracies is crucial, and if you notice any mistakes, make sure to dispute them immediately.

Keeping your credit card balances low is also an effective way to help raise your credit score. High credit card balances can hurt your credit score, so it’s crucial to keep them as low as possible.

Finally, using credit responsibly is crucial. You should use credit wisely and avoid applying for too many credit cards or loans simultaneously.

How do I choose the best bank account?

To choose the best bank account, you’ll need to evaluate your individual financial needs, since different accounts cater to different needs. Some factors to consider when making your choice include the following:

  • Fees: Finding a bank account with low or no fees is vital, so keep an eye out for accounts with no monthly service fees or ATM fees.
  • Accessibility: Depending on your preferences, it’s crucial to choose a bank with convenient locations or online banking options, making it easy for you to access your account.
  • Interest rates: If you plan to save money in your bank account, it’s essential to select an account with high-interest rates. This way, you can earn more interest on your savings.
  • Features: Some bank accounts offer additional features, such as cashback rewards or budgeting tools, which can be beneficial to you. Take your time to research the available options and choose an account with features that match your needs.
  • Reputation: It’s important to consider the bank’s reputation for customer service and reliability before choosing an account. This way, you can be sure that you’re dealing with a bank that has a good track record in serving its customers.