Self Help Credit Repair

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Bank Accounts for Bad Credit

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Second Chance Checking

Banks have created situations, some say by design, where clearing policies and penalties can create a situation where a single bounced check can cause a modest overdraft to balloon into tens or even hundreds of dollars in fees. If the fees are not covered (bounced check fee, negative balance fee etc.) the bank will likely close your account.

Many banks use a service called Chexsystems. It is a reporting service that reports on a consumer’s past checking account activity. A negative Chexsystems report usually means that banks who use the service will not open a checking account for you.

For instructions on how to be removed from Chexsystems, please see: ChexSystems Removal.

There are also some ways to  maneuver around Chexsystems. Banks do not normally use Chexsystems when a patron is opening a savings account. So, if you open a savings account and then join Paypal, using your savings account, you can pay bills and receive payments that will go directly to or from your savings accounts.

The other way around a negative Chexsystems report is to find a bank that doesn’t use the reporting system. While 80 percent of U.S.banks do use the system, 20% do not. The following is a partial list of facilities not using Chexsystems as of December, 2010:

AccountNow Vantage
Compass Bank
Currency Connection
Peoples Bank
Woodforest National Bank
Woodforest Bank

Branches may not be convenient. But, with Internet banking, direct deposit, and bill pay, branch location should not be an issue.

To open an account with any bank, you will need a photo ID and a social security number. These documents can be scanned into a computer and attached to the application. The majority of banks offer free checking if you direct deposit your paycheck or retirement check.

Some of these accounts are not exactly checking accounts. They are free debit card accounts that also provide you a routing and account number for direct deposit. These are the accounts mentioned earlier that you link to Paypal for bill paying.

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