Denied for a Checking Account? Here’s Why, and What To Do Next

Written By Mary Beth Eastman
Last updated August 21, 2018

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Personal Finance
August 21, 2018

Simple. Thrifty. Living.

Getting a checking account should be easy, right? You simply visit the bank of your choice, fill out an application, and open a new checking account. But believe it or not, you can actually be denied for a checking account, and if you are, you will certainly be wondering why.

When you apply for a checking account, banks actually check your banking history, and if it reveals too many bounced checks or fees that were late or still unpaid, the bank can deny you a new checking account.

However, it is also a possibility that you were denied a checking account simply because of management error at another bank. Banks often keep a banking history of its customers in a system called ChexSystems. Not everyone will have a file with ChexSystems, but if you do, it could be outdated or incorrect.

If you are denied a checking account for any of the above reasons, here is what to do next.

First, contact ChexSystems and ask for a copy of your file. If you have one, they are required by law to give it to you. The file will show if you have any history of bouncing checks or not paying fees. If you still have unpaid fees, you can reach out to the creditors to attempt to settle the debts.

Or, if you notice any errors on the file, you can dispute the information with the company. Information is usually kept on the file for five years. Look for debts that might have already been paid but are not showing up as paid in the file. Receipts will certainly help to prove that a debt was paid, and the information in the file can be corrected or removed.

Some banks will offer what is called a second-chance checking account. These are similar to a regular checking account but with fewer perks and protections, and a small monthly fee. It’s a much better alternative to using check cashing companies.

You can also use a prepaid debit card in lieu of checks, as prepaid debit cards issued from banks will allow you to engage in money transfers and bill payments just as a checking account would. You can also order these cards online—do some research to see which prepaid card will work best for your needs.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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