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Can Your Debt Problems Prevent You From Opening a Bank Account?


You may have seen personal finance vloggers field questions from consumers who are stressed out about how their low credit score is stopping them from getting car loans and is making their credit cards more expensive.  To you, this sounds like high class worries.  These people who are worrying about what they can and cannot do given their current credit score all have bank accounts, which is more than you can say for yourself.  The fact that it is expensive to be poor, and that it costs money to use your own money hits home with the unbanked even more than it does with everyone else.  Your dream is to open a bank account; this way, it will cost you less to receive your paycheck and to pay your bills.  Your credit score doesn’t matter when it comes to opening a bank account, but there is another reporting system out there that is telling banks that you are bad news because of your history of financial hardship.  If old debts are making it difficult for you to open a bank account, contact a Miami debt lawyer.

The Tyranny of ChexSystems

When you borrow money or make payments on a debt, the lenders report this to the credit reporting bureaus, namely Equifax, Experian, and TransUnion; the credit reporting bureaus do not keep data on things like checking accounts, rent payments, or buy now pay later (BNPL).  Another reporting system keeps track of consumers’ bank-related behavior.  Its name is ChexSystems, and it behaves like those of Santa’s elves who are tasked with maintaining the naughty list.  These are some types of information that ChexSystems compiles about consumers:

  • Closed bank accounts where the consumer owes an outstanding balance
  • Checks drawn on your bank account that were returned for insufficient funds
  • Failed attempts to open a bank account
  • Overdrafts
  • Times when the bank decided to close your account

What to Do If Old Debts Are an Obstacle to Opening a Bank Account

If a bank rejects your application to open a checking account, request a copy of your ChexSystems report.  Read it carefully and dispute any inaccurate information.  Pay off balances that you owe on closed accounts before you try to open a new account.  If you can’t get the account you want, open a second chance bank account; these accounts are designed for people with a troubled banking history, just as secured credit cards are meant for people with poor credit history.  Second chance bank accounts charge fees for things that people with an unblemished banking history can get free of charge, but that is to be expected.  For example, the bank may charge you a monthly fee for the account.  It is better than not having a bank account, and it will improve your financial situation overall.

Work With a Debt Lawyer About Qualifying to Open a Checking Account

A South Florida debt lawyer can help you become eligible to open a checking account.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.



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