Here’s Where to Go After a Bank Turns You Down for a Checking Account

For most people, a checking account is an important part of daily money management. However, for those who have struggled to manage their accounts responsibly, accessing this basic financial tool can be a challenge without a second-chance checking account.

A person with a history of missing bill payments gets reported to the credit bureaus, and their credit score suffers as a result. “Similarly, banks share information about depositors through the ChexSystems, which tracks things like overdrafts, bounced checks and unpaid fees,” says David Frederick, senior vice president and director of client success and advice at First Bank. When you apply for a new bank account, there’s a good chance the bank will look you up in ChexSystems or a similar database, such as Early Warning Services or TeleCheck.

“A person who has had difficulty with bank accounts in the past may have a hard time opening another bank account in the future,” Frederick says.

The good news: Some banks offer second-chance checking accounts specifically for people who have had a checking account closed in the past, says Max Benz, founder and CEO of personal finance blog BankingGeek. “Other banks offer second-chance checking accounts to people who have had credit problems,” he adds. (Not sure if you’re in the system? You can request a copy of your annual report for free from ChexSystems.)

A second-chance checking account is an option for banking customers who have struggled with deposit accounts in the past, such as with repeated overdrafts, unpaid negative balances or involuntary account closures.

Banks that offer these accounts are willing to overlook past mistakes and help customers access the basic features needed to manage their money. Frederick says that these accounts are rarely offered by large national banks and are usually found at smaller local and online banks.

That said, banks that offer second-chance checking accounts understand that account holders present a higher risk compared with customers who have a clean banking history.

“Second-chance checking accounts typically have higher fees and interest rates than regular checking accounts,” Benz says. “But they may be a better option than a prepaid debit card or a check-cashing service.” These nonbanking services can be much more expensive and even verge on predatory. Still, he advises reading the terms and conditions carefully before opening a second-chance checking account.

Frederick says that for people struggling to improve their credit, control their budget or simply put themselves on a better financial path, second-chance accounts can be a valuable tool. Plus, opening a second-chance account can help you achieve good standing again.

“After a customer has had a second-chance account for a set period of time – typically a year or two – with no negative actions or reports, the account will often convert into a normal bank account without extra restrictions or costs,” Frederick says.

Some second-chance checking options are better than others. The best accounts offer low or no fees, widespread ATM access, low opening and minimum deposit requirements, and other perks. Below are seven strong options to consider.

Though it’s technically not a second-chance account, Capital One stopped relying on ChexSystems when screening account applicants in 2014. So a poor track record won’t prevent you from taking advantage of the benefits of a 360 checking account, including no fees or minimums.

Chime is a financial technology company founded on the idea that basic banking services should be accessible and affordable. Like its other account options, the second-chance bank account doesn’t come with any hidden or monthly fees or account minimums.

This second-chance checking account is offered by Go2bank, a neobank under Green Dot, a financial technology company. In addition to basic checking account features, this account also provides a highly rated mobile app, ASAP direct deposit and other perks.

If you apply for a Go Premium or Go Full Access checking account and are denied, the bank will reach out to you about applying for the Go Further account instead. It’s designed for customers who can’t qualify for a traditional checking account right now but hope to in the future. After 12 months of responsible use, GTE Financial will upgrade your account.

The Essential checking account from LendingClub is designed for customers without a perfect banking history. It helps you better manage your money with technology and limited fees.

Varo is an all-mobile bank account app that allows customers to perform branchless banking. Its second-chance checking account doesn’t charge monthly or hidden fees.

One of the only major national banks that offers second-chance checking, Wells Fargo has the Clear Access Banking account designed for customers with lower balances, including teens.