In This Article
Are you having trouble opening a bank account? Tiffany understands, and she's here to help! She explains the most common issues that might be preventing you from getting an account, like bad credit history or previous closures, as well as several solutions.
From second-chance checking accounts to prepaid cards and improving your Chexsystems score, Tiffany has ideas for making the process easier.
Check out the full article on her blog and contact her with any questions.
Every Tuesday, Tiffany answers one of your submitted questions. To submit a question for an upcoming episode, visit here: https://www.moneytalkwitht.com/asktiffany
I Was Denied: 6 Alternatives When You Can’t Open A Bank Account
Intro/Outro: You know what it is. That's right. It's time to talk money. With your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the Money Talk with Tiff podcast.
Tiffany Grant: Hey, hey. Welcome to another Tiffany's Take Ride. Answer your mini questions. If you want your questions answered on the podcast, just go to www.com/tiffany. So. This question today, I actually answered on the blog. Um, but I wanted to make a podcast episode for those that don't read the blog. Um, so that way you can get this information as well.
And the question was, what do I do if I was denied a bank account? Now most people don't even realize that this could be a thing, but it. It definitely can. When you go to open a bank account, they have you fill out an application and they run that information through their system, and if. And there's some reasons, which I'll get into in a few minutes, why you wouldn't be able to open that bank account.
So this is definitely a thing, and I've worked with clients where they were not able to open a bank account and before I worked with those clients, I. I didn't even know that this was possible. Um, so I just wanted to give some awareness to the issue and then also some solutions in case you are in the situation where you can't open a bank account.
So first and foremost, let's talk about the reasons behind why someone wouldn't be able to open a bank account. So if you had previous account closures, like for instance, um, if you were in the negative a lot. Well, quite a bit. And they said, you know what? We're closing your account and you never paid that balance.
Um, that could affect you from opening a bank account if you have bad credit history. Um, that can also affect you. And when you do have situations where you owe the bank a lot of money, they use a system called Check Systems, right? So check systems is used by banks, and that is kind of like your. I guess Experian, Equifax, TransUnion for the bank system.
And so if something like that happens, they report it to the check systems so that way all the other banks can look and say, Ooh, this person, you know, skated on this bank. I don't know if I wanna do business with them. So every time you apply to a bank account, for the most part, um, they run it through that check system.
So you wanna make sure that you're doing right by the business relationships that you do have. Now if you are denied a bank account, there are a few things that you can do to, um, you know, kind of circumvent having to have a bank for a little while. Um, so I will warn that some of these suggestions do come with high fees and things like that, which I'll definitely tell you about when I get to them.
Um, so this is not like a permanent fix or something that you would wanna do for the long term. It's just. A way for you to, you know, do the services that you need in the short term until you're able to get a bank account again. So first and foremost, this is the best thing to do out of this list in my opinion, and that is to open a second chance checking account now.
These checking accounts you can find at many of the major bankers. Um, but you know, you have to do your research. Um, I think in the article, I linked to some resources for this, but a second chance checking account is specifically designed for people with a trouble banking history. So they. If you are denied a regular bank account, um, you should be able to open a second chance checking account.
I would suggest making sure that you understand the requirements to open opening those accounts and also the fees that are attached to it, because of course it's not perfect. It's not a perfect solution, but. It can help you improve your financial record to the point where you can open a bank account.
So I highly recommend checking those out and just doing your research on second chance checking accounts. Okay. Um, when I was doing research for this, because I've wrote about this not only for my blog, but also for. A F C P E when I was doing my research. There are quite a few options out there, so definitely make sure that you're looking it up and researching.
Okay. Another thing that you could do is try to get a co-signer for your bank account. So much like when you can get a loan, let's say you don't qualify by yourself, but you can get somebody to cosign for you. You can kind of do the same thing with a bank account. Now I will warn. That when you have a co-signing relationship, a co-signer, co-signing, it does make things complicated.
So be ready for that if you use a family or friend. Uh, but you know, if you'll both have an understanding and you're like, look, this can help me in the long run, you can use it to get your um, You know, your banking history up, then by all means, go right ahead. But I will warn that it does make relationships complicated.
So, um, you can't ask a family or friend with a good financial record to kind of cosign that for you. Um, and just like I said, delve into the responsibilities involved for both the cosigner and the account holder. In this relationship. In this arrangement, you do not want. Things to go self. Okay. Um, another thing that you can potentially do is use check caching stores.
So if this is, now, this is probably gonna be the only time where you will hear Tiffany recommend a check caching place, uh, because I do not agree with them at all. But in cases like this and you really need, you know, stuff like getting a check cashed if you don't have direct deposit onto a prepaid card, cuz that's another suggestion, you can get a prepaid card.
I know when I worked at a, uh, staffing agency, they gave everybody prepaid cards in case they didn't have a bank account for a direct deposit. So definitely check out that option too. But anyway, skip it ahead. Um, check cashing places can help you pay bills. You know, cash your checks reloading your prepaid cards and things like that.
But like I said, make sure that you understand the potential drawbacks of those. They usually have high fees, which I cannot stand. Um, but in this situation it might be beneficial for you. But just make sure that you're doing your proper research before you do this. I would also say back to the prepaid cards, that is a great option.
Um, now a lot of times they might have fees as well, so make sure you're double checking your paperwork because sometimes they will fee you to death. Um, I've seen prepaid cards where they charge you every time you do a transaction. It doesn't matter if it was an ATM or not. Any transaction they were charging a fee.
So just be aware of those and make sure you're reading the prepaid card paperwork cuz all cards come with paperwork, so make sure you're reading that okay. Um, so you won't get stuck with them eating up all your money. Okay. All right. Um, and then the next one I would wanna say is work on improving. Your check system score.
Now, a lot of people don't even know that this exists, and I didn't, honestly, I didn't either until I did the research for this. So learn about that and how it tracks your banking history. Matter of fact, I might do an article on this, so make sure you're subscribed to the blog or you keep checking the blog, cuz I think I might do an article specifically on check systems.
But, If you learn about it, you can learn how you can improve it. And so if you can improve your check system score, you will eventually be able to open a bank account if the issue was your check system score. Now, um, I gave you all of these options and I know it's a lot to take in. I gave even more in the article, but I wanna kind of keep this episode short just to build awareness and let you know that there are options out there.
So if you're interested in reading more about this issue, make sure you check the show notes because I'll post the link to the full article there. But if you do have issues with opening a bank account, feel free to reach out to me. Um, this is stuff that I help people with all the time, and I'll be more than happy to help.
So if you have a question that you want answered on the podcast, Make sure you go to www.moneytalkwitht.com/x Tiffany, and I'll be happy to answer for you. But until next time, I hope you all are staying safe and well and I will see you next week. Bye. Thank
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Is opening a bank account giving you a headache? Don't worry, Tiffany from Money Talk With Tiff has your back! In her recent podcast episode, she delves into common roadblocks that prevent people from accessing bank accounts and shares practical solutions you can use to overcome these barriers.
The Reasons Behind Bank Account Denials
Whether it’s bad credit history or owing the bank money, there could be various reasons why you're being denied a bank account. Let's take a look at the main factors:
Previous account closures
- A history of past account closures may raise red flags for banks and result in a declined application.
Bad credit history
- Banks are cautious with customers who have a negative credit history or lack basic credit documentation.
Owing the bank money
- If you owe money to the bank, they might refuse to provide additional services or grant a new account.
Banks using “ChexSystems”
- Banks use a system called ChexSystems to track individuals with negative banking records.
Strategies To Handle Banking Limitations
Despite these barriers, there are ways to regain control of your financial situation. Here are Tiffany's top recommendations for handling bank account denials:
- Open a second-chance checking account
- Designed for people with a troubled banking history, these accounts provide an opportunity to rebuild your financial reputation.
- Get a co-signer for the bank account
- A co-signer can help you gain access to banking services, but be cautious as it can make relationships complicated.
- Use check cashing stores with caution
- While check-cashing stores can be useful, they often come with high fees and should be used as a last resort.
- Obtain a prepaid card
- Prepaid cards can provide similar features to a checking account, but be aware of potential transaction fees.
- Work on improving your check system score
- By addressing the underlying issues affecting your financial record, you can increase your chances of opening a bank account in the future.
Take Action and Reach Out for Help
Tiffany invites listeners to reach out for personal assistance and check her website for more information related to ChexSystems and solutions.
Don't miss out: Learn more about overcoming banking barriers by reading the full article here!
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