People with Poor Credit Can Still Get a Bank Account

Adam Rust

The good news is that you can still get a bank account if you have bad credit. I will say it again: you can get a bank account even if you have bad credit.

If as you read this, your mind says “no, that’s not true,” then hear me out.

Banks turn down applicants for accounts when they believe that the person poses too much risk. To gauge that decision, they utilize information from other banks and from credit bureaus. Many banks subscribe to registries that provide a list of people who have written bad checks or who have outstanding debts on closed checking accounts. Some of the most well-known companies in this space include ChexSystems and Early Warning Systems.

Why do they worry about risk?

They want to keep their money, and due to the powers inherent in checking accounts, they take a risk with each new client. The main problem unfortunately a fundamental one. Checking accounts have checks.

There is no way to verify that a check will be good. A check is simply a message, written on an old-fashioned analog non-digital piece of paper, that instructs your bank to pay money from one account to another.

Writing a bad check is only one way that a person can end up with a negative balance in their account. When you authorize a company to pull money out of your account electronically, the bank must honor your request and make the payment. Because time usually passes between the moment when the request for payment occurs and the actual transfer of funds, no one can be sure that good funds will be on hand when the time comes to execute the transaction.

The bank has the same challenge with verifying good funds for a signature swipe at the point-of-sale.

As a result, Americans pay approximately $15 billion in overdraft fees every year.

Picture of card
Picture of card

Most people believe that you have to “opt-in” for an overdraft service. It is just not true. Opt-in coverage only applies to transactions where good funds can be verified.  

You can get a bank account if it does not have overdraft or checks. These accounts exist if you know where to look for them.

As a nonprofit-owned consumer advocacy organization, WiseWage charges itself with the mission of letting people know that they can bank without overdraft, regardless of their banking history.

While WiseWage has a choice of accounts, each with different features, they all have to meet the same criteria:

• No overdraft fees

• Open to everyone, regardless of banking history.

We also like it when the accounts can be fun. All of our accounts have a personality.

Our FDIC-insured accounts do not pull credit. They ask for identifying information such as a social security number and a birth date because they need to verify your identity – not your credit. All banks have to make sure “you are who you say you are” to fulfill the expectations of their federal regulators. Doing so protects the US banking system from bad actors who would try to use accounts to launder money.

Thus, you can get an account regardless of your credit history. I hope I have explained why a person with bad credit or even without any credit at all can still qualify for a bank account. Please reach out to me if you have any questions.

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