Can you get a bank account if you have bad credit?
If you have a poor credit history, you may be left wondering if it will be possible to open a current account. Thankfully, there are options available to you even if you are struggling with bad credit. No matter how bad your credit history is, you should be able to open at least a basic bank account that lets you store and manage your money.
Will the bank run a credit check when I try to open an account?
Most banks do run credit checks when you apply for accounts with them. The reason for this is that many accounts come with overdraft facilities. If you apply for an account with an arranged overdraft, the bank will need to see if you are a suitable candidate for credit.
However, if you’re applying for a basic bank account with no credit facilities, it’s unlikely that a credit check will be run. This is because the bank won’t be lending you any money. Even if a check is run and a poor credit history is detected, you’ll normally be permitted to open a basic account. Unemployment shouldn’t usually stop you from opening a basic account either.
Why do I need a bank account?
Today, the vast majority of people get their wages paid into bank accounts. Contactless transactions are on the rise too, and you need a bank account to buy products and services without physical cash. You will normally need a bank account if you want to wish to purchase products and services online. Life without a bank account would be very challenging in 2021.
Are basic bank accounts widely available?
Most banks and credit unions in the UK offer basic accounts. You don’t normally need to pay a monthly fee to open a basic bank account, and you’ll be given a debit card so you can make purchases both online and offline. You’ll usually get access to online and mobile banking facilities too so you can manage your money, set up direct debits and check your balance.
Could my application be refused?
If your application for a basic bank account is refused, this won’t normally be due to bad credit. You’re more likely to be declined if you don’t have satisfactory ID including proof of address or if you fail a fraud check. Make sure the documents you use to open your account are valid and not out-of-date to gain approval.
What can I do with a basic bank account?
Though you can’t get an overdraft with a basic bank account, you can still use it to carry out many financial transactions. These include paying bills via direct debits and standing orders and buying products and services with your debit card. You can check your balance through online banking, at a cash machine and in a branch if the bank has a physical presence. You can also withdraw cash at post offices and cash machines.
Can a basic bank account improve my credit rating?
If you pay your bills on time and don’t miss direct debits, a basic account may help you build your credit score back up and gain access to more financial services. Keeping your contact details up to date with the bank can also help.