If you have bad credit you can't open up a new checking account at just any bank

[proud2BlibKansan]

or credit union.

I know several people this has happened to. Like many of us, they read here and they get emails telling them to pull their money out of BofA or whatever that day's bad bank may be. But when they go to that new bank or credit union, they are told sorry you can't open a checking account here.

Then where can they go?

Please remember this before you tell anyone they're using the wrong bank. Not all of us have the option to change banks. They aren't like grocery stores.

[Lucinda]

1. Good point.

:hi:

[closeupready]

2. True, but depending on what kinds of banking services they need,

there are options for people with bad credit. Not as many as those with good credit perhaps.

If one has an existing checking account with BofA and bad credit, then yeah, they are probably stuck and have to work within the framework dictated by BofA policy until their credit improves.

[proud2BlibKansan]

3. I can't imagine why anyone would go from having a checking account to not having one

Sure there are options but if you want a checking account you're out of luck if you have bad credit.

[closeupready]

10. If someone knew that 1) they have bad credit; and 2) they have an existing checking account, then

yes, most people would keep it open, even if the costs had increased. Then, when your credit improves, open one elsewhere.

That said, people CAN function well without checking accounts. Can't think of any situations anymore where one would need a checking account, since you can pay just about all bills online or over the phone, direct debit.

[proud2BlibKansan]

11. If you want a debit card you have to have a checking account

It's hard to manage nowadays without that plastic card.

[GreenStormCloud]

4. True. When I married her my wife was barred from getting a checking account.

One of the credit reporting companies was listing here as deceased. And her ex-husband had bounced some checks on her account while they were still married. We got the "deceased" think cleared up but she could only be with a good bank on my account. It took a couple of years before we got he name cleared from her ex's stuff. We have been with BofA for about 10 years now, with no problems.

[RevStPatrick]

5. Open the new account BEFORE closing the old one.

That seems like a no-brainer.

[snooper2]

8. One would think wouldn't they

:eyes:

[proud2BlibKansan]

15. Yes it does but all the angst may cause some to act impulsively

[Sherman A1]

6. A simple thing to do in the case of BOA

is to find work arounds to their fee thing.

Pay Cash (they are not charging fees to use their ATM's by their customers as I understand).
Use a Credit Card
or whatever works out best for the individual

$5.00 per month fee, I believe to be excessive, however some may not. They may also suffer the "Netflix effect" by this price increase, but time will tell.

[NNN0LHI]

7. I did not know this

Thank you for posting this information.

Don

[Safetykitten]

9. The fact that people are unaware of this...very telling.

[proud2BlibKansan]

20. What makes you say that?

I had no idea banks refused customers until it happened to a friend of mine several years ago. I had no reason to know, having been at the same bank for many years - no reason to switch banks, not in the banking business. :shrug:

[RebelOne]

12. That's right. I tried many years ago to open an account

at a bank other than my own and was turned down because I had declared a Chapter 7 bankruptcy. That bankruptcy was discharged. But then in 2008, I had to declare a Chapter 13 bankruptcy. That bankruptcy has also been discharged. I do not owe anyone anything and I plan to keep it that way. I have banked with Bank of America for the past 15 years and could not switch banks because of those past bankruptcies.

[dtexdem]

13. Go to open accounts at a credit union, or alternate bank.

Then, once any new accounts are in place, pull out of BoA, or others, and put the money into the new accounts.

[proud2BlibKansan]

16. Credit unions here are even stricter than banks

Banks are more likely to open checking accounts for folks with bad credit.

[undeterred]

14. Look for "second chance" checking accounts.

I think there is a minimum credit score of 500 at some banks. Now that sounds pretty low, and some people are below that, but if people take steps to repay old debts credit can usually be improved.

[Speck Tater]

17. I know a guy who figured out a way to get around that.

Step 1: Have a friend with good credit open a checking account in his own name, but you supply him the money to open the account.

Step 2: After the account is established, like maybe a month later, your friend brings you in to sign as a co-owner of the account, making it a joint account. For that they apparently don't check any credit history on the new co-signer.

Step 3: After that is all taken care of go back a month later with your friend and say you are splitting up and both want separate accounts again. Since you are already an account holder at the bank they don't check you again, they just give you both a new account number.

I'm not sure this would work at every bank, but I have a close friend who did exactly this at a big regional bank when nobody, including that same bank, would let him open a checking account by himself.

[newblewtoo]

18. Something else to consider

when opening a new account. Some businesses use a company to validate your check as good and they base this on the amount of activity on your account.

I found this out quite by accident when I had a major auto repair. I transfered money into my share draft account at the credit union and wrote a draft to the garage. They declined to take the draft. I asked why and they gave me a number of the service they use. (I don't remember the company they used but lots of places do, something like Vericheck?). I called the company from the courtesy phone and basically said "why the fuck did you tell the garage not to take my check?" They said that there had not been enough checks written on the account. I said, "did you check the balance?" They said no, that is not what they do, they base their decision on activity.

At about this point the credit manager at the garage said, "Look I know this guy, he is a regular customer, I will sign off on the check." (he quite possibly heard the tone of my voice on the phone) Of course this happened at the end of the day when the credit union was closed and I had no way of getting cash, if this guy hadn't known me and stepped up I would have been SOL until the next day.

[proud2BlibKansan]

19. That is very interesting

Thanks for sharing.

[eppur_se_muova]

21. This is why I never close my credit union accounts.

I have moved around a lot, have several accounts held with $5 in savings.

[proud2BlibKansan]

22. Sounds like a smart plan.

[HipChick]

23. Credit Unions are also starting to charge for Inactivity...Inactivity fees

They understand why people are doing this too

[eppur_se_muova]

24. In my case, they've closed my checking account at one ...

nothing is foolproof, certainly not in capitalism.

[saras]

25. Credit unions are coops. Their behavior depends on their membership's values.

I imagine that if you live in a red state, many credit unions will be rather conservative.

I'm luckier than that. My bad credit didn't stop me from getting a credit union account, it just placed a few additional restrictions on it, which MY credit union was happy to work with us on to make them work for us, given the regulations they had to work under.

To me, much of the point of a credit union is the small and local aspect, so something like a federal employees' credit union wouldn't be as likely to be friendly and flexible.

[SoCalDem]

26. When my friend declared bankruptcy, I opened a new account at MY bank

with her as a signer. Checking w/debit card-ATM, savings. I never activated MY debit card, and after a year or so, I had my name removed from the account. All she had to do when we opened it, was to show her ID..no credit check.

We bank at Provident Bank in SoCal

I did the same for our sons when they were opening their first accounts...although I DID monitor their accounts closely:evilgrin:

[undeterred]

32. Yeah, I'd be careful with that.

Unless somebody knows the friend really well. "Friend" could turn out to have felonies on their record - large overdrafts that go unpaid count as felonies. Not sure if this could hurt the person co-signing. I bet most banks DO check when the other name is removed from the account, if its going to be used for checking or a credit card.

[SoCalDem]

36. I've known her for nearly 30 yeras.. she's the sister I should have had

instead of the creepy one I got:rofl:

I would not do this for just anyone:)

[YellowRubberDuckie]

27. Since when did pulling credit become a part of opening up a checking account?

If you have the money and the minimum balance, you can open up an account just about anywhere. Where did you hear this?

[ProdigalJunkMail]

28. uh, about 20 years ago...

at a bare minimum they will use a service like TeleCheck to see if you have a record of insufficient funds...

happens all the time.

sP

[Yo_Mama]

29. It's just about universal

Banks are also required now to use Identity Verification for customers, and the easiest way is electronic, so most places take your ID, do a credit/ID check, and if you have ever stuck a bank with fees or you have pretty bad credit, they refuse because it is a loss risk to them.

The current environment is one in which it is very difficult for banks to make money off deposited funds, so they are tightening up their loss controls even more.

[YellowRubberDuckie]

30. Weird.

I work for a Bank. Never heard that. I know that if we have a lot of NSFs we get counseled and possibly lose our benefits, but since we keep a little bit in the savings, and I watch the account like a hawk, we stop spending when it gets close to empty. We also keep instant potatoes and Ramen on hand at all times just in case we run out of money and have to eat.

[Yo_Mama]

40. This is for bank depositors

When you work for a bank, you are subjected to a higher level of scrutiny. Because employees with financial troubles are more likely to commit theft, banks are required to screen their hires and monitor their personnel for such signs. The bank should have a record showing that they are doing this, and your institution probably has a set policy used to address such issues!

NIM (Net Interest Margins) have fallen hard and are going to drop again from the Fed's Operation Twist. Financial institutions will have to tighten up underwriting and carefully monitor losses from deposit accounts to control their financial losses in this environment. By Q1 next year this graph is going to look a lot worse:


As NIM falls losses become ever more deadly, so most financial institutions will keep tightening credit standards. Losses from checking accounts can mount quite rapidly, and the bank is on the hook for them if they cannot recover from the customer.

[Name removed]

31. Deleted message

Message removed by moderator. Click here to review the message board rules.

[JVS]

34. My experience

I don't have much of a credit life and thus don't really have good credit. Landlords get a number that seems to displease them. On the other hand, I always save from my earnings and could pay for a year of rent in advance. So while the landlords don't much like my numbers, my bank kisses my ass and treats me really well.

[Liberal_in_LA]

38. It's an odd thing...a good credit number is valued over $$ in the bank

[undeterred]

35. The poor always get screwed the most.

There is a whole underclass of people paying cash in this country. Some people are here illegally. The bottom credit score for getting a checking account is around 600 and for getting a savings account its around 500. The banks don't have to do business with just anyone and they screen out people with past financial problems. Yes, they will refuse your money.

Credit unions are more lenient.

[JVS]

33. Really? I've never encountered any resistance from banks in setting up checking accounts.

As long as I show up with my cash, they seem happy to start me up.

[proud2BlibKansan]

37. I know several people who have been refused checking accounts

Which is why I started this thread:)

[etherealtruth]

39. Good information

These policies prevent folk from taking their business elsewhere.

I suppose a good number of BoA customers will be trapped into paying the $5/ monthly extortion fee for having a debit card

[dsc]

41. I know that my credit union was good for me

I didn't have great credit by any standard but got an account. I think there might be a difference between getting a VISA type debit card and just an ordinary checking debit account.