Checking Accounts that Don’t Require a Credit Check

There was a time when your credit did not dictate whether or not you could obtain a standard checking account. However, over time, more banks and credit unions began requiring customers to good credit in order to open an account.

In the eyes of financial institutions, a good credit score means a customer is reliable and has good money management skills. Unfortunately, this good credit requirement imposed by most banks can’t be met by millions of potential customers. Therefore, they must turn to no credit check bank accounts or other alternatives to manage their banking needs instead.

Bad Credit Versus No Credit When Opening an Account

It’s important to make the distinction between customers who hope to obtain a checking account with bad credit and those who have no credit.

When it comes to loans, lenders often view individuals with no credit history similarly as those with bad credit because there’s a high level of risk in both cases. Institutions issuing bank accounts view credit a bit differently, however.

They typically don’t mind giving a person their first shot at proving themselves in the world of financial management and are willing to issue standard checking accounts to anyone who can meet the basic account requirements. But individuals who also have bad credit are in a rougher position because they’ve already been given a chance and proved (at least on paper) that they couldn’t manage their money responsibly.

As of July 2010, more than 25 percent Americans had a subprime credit score. That means 43.4 million people had scores that equaled 599 or lower–largely due to the financial crisis, massive job loss, a rise in foreclosures and an increase in bankruptcies.

For these customers, there haven’t been many options available in the world of banking. For many, the only way to keep their money in a bank and have access to it when needed has been through no credit check checking accounts.

Types of No Credit Check Checking Accounts

The good news is banks have started recognizing that people can make mistakes or are sometimes the victims of unfortunate circumstances. This is why they are starting to offer checking accounts for bad credit while others are bypassing the credit check process altogether.

Here are some options for individuals with credit problems to consider:

1. Second-Chance Checking Accounts

The more popular banking option for individuals with bad credit is a second-chance checking account. These accounts are usually geared toward people who have had problems managing previous bank accounts and are listed on Chexsystems or Telecheck. However, individuals who have credit issues could also benefit from these accounts.

They typically allow you to open a checking account on a probationary basis with limited access to standard account features. Then after you’ve proven that you can manage the account responsibly over a specific period of time (usually 6-12 months), you will be able to either expand the account or open a new one with full features.

2. No Credit Check Banks

There are some banks that don’t require a credit check before opening an account.

For instance, Citizens Trust Bank in Atlanta, Ga. offers the CTB Direct Checking Account, which is a free checking account with full features, including an ATM card, online banking free check images, e-statements—and the best part is no credit checks are needed to open the account.

These banks are not always easy to find, but do exist. So do some research in your area to see what you can find.

3. Check Cards

You could also consider handling some of your checking needs with a check card. This card comes in the form of a prepaid debit card or credit card and might allow you to direct deposit your paycheck right onto the card, make free ATM withdrawals and debit card purchases, cash advancements, free online bill pay and more.

But before using this type of card, keep in mind they often come with fairly high monthly and/or annual maintenance fees. For this reason, it’s good to consider the bank checking account as your first option and this as your second.

It’s good to know that there are no credit and bad credit checking accounts out there if you need them. So get out there and explore your options. You’re sure to find a checking solution that works for you.