Bank Account Articles:

Bank Accounts for People with Bad Credit.

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In a world where everyone is being scrutinised it is a known fact that if you have suffered any type of credit problems, then your ability to borrow money or even open a new bank account can be severely restricted.

We can understand you being declined for some finance if you have defaulted on a loan or failed to repay money you owe, but it is a little confusing why you should be declined for a bank account, as you are technically not asking for any credit.

The question is then, as we all need a bank account to manage our finances, what options are there available and are there any banks out there that will give me an account if I need one?

Are there Bank Accounts for People with Bad Credit?

Yes - so your biggest fear of not getting an account can be dismissed straight away, as you WILL get an account, the question is how and what will it cost?

What if I am Bankrupt, can I still open an account?
Essentially YES, so even those with a severe credit problem like bankruptcy will still be able to open a new account. So present or discharged bankrupts can apply and as long as you can prove your identity, you will be guaranteed a new account.

Will the account have all the features of a normal high street account?

The accounts which you will qualify for will have all the main features but with no credit facilities like an overdraft, so if there is no money in your account, then any standing orders or direct debits set-up will simply not get paid.

Will this mean being charged or penalised?
If you miss a payment like a standing order or a direct debit, then you will not be charged by the bank like you may be if you had a regular high street account as there are no credit facilities, so there is no chance of going overdrawn or being charged for doing so.

You may however be penalised by the organisation you will owe the money to, so you may need to check they will not either charge you a penalty or stop supplying a service to you if you do miss a payment.

So what is the availability of bank accounts for people with bad credit?

There are now several options available for those who need a new account but have some form of bad credit, so depending on what options you require and the cost of the service, you will have a choice.

High Street Bank Account Option - Even if you have already been declined by one of the main high street banks for a new account, you can still open a new account if you use a regulated Bank Account Intermediary for the opening process. There will invariably be an initial cost involved ranging between £99.00 and £149.00 however he service they offer will be Guaranteed, meaning if for any reason they fail to open you an account you will receive a full refund.

These accounts are opened at a higher level than the branch, meaning more discretion can be used whilst offering exactly the same features offered to those applying at branch level. You will still need to verify your details however when choosing your local branch your application will be 'pre-approved' so will be a formality when completing the application process.

Managed Bank Account Option - There are a number of these accounts now available, all with slightly different options and services available. The cost will also vary, from those charging an opening fee of around £25.00 to those who will do this for free, and monthly from £12.50 a month to £19.50 a month.

There are no credit checks with these accounts, meaning as long as you can pass the identity checks even with the most severe past or present credit problems can open an account, including those in bankruptcy.

So there are bank accounts for people with bad credit and although they come with a monthly fee it is worth remembering there are never any contracts with these accounts, so if you wish to cancel, you can do so without any penalty.

 

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PLEASE NOTE: With a GUARANTEED Bank Account you are under no obligations at any time to complete the application process and there are no contracts, so you can CANCEL AT ANY TIME with no penalty.

 

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