What to do when you can’t open a bank account


Opening a bank account is usually easy. But just as a credit card application might not be approved, a bank or credit union might deny an account application.

If this happens to you, know that you have other options. However, it is a good idea to try to find out why the bank made the decision. Of the 7 million U.S. households that don’t have a bank account, about 20% say one of the reasons is identity verification, credit problems, or problems with an old bank account, according to a survey by 2019 from Federal Deposit Insurance Corp. Other reasons include customer concerns about maintaining minimum bank balances and inconvenient bank locations.

If you’re having trouble opening a bank account, here are some tips on what to do next.

When applying for a bank account, you usually need to provide your name, address, social security number, and other personal information. Errors in any of these items can affect your application.

Your bank will likely work with third-party companies to electronically verify your application information, says Sarah Hoisington of SentiLink, an identity verification company in San Francisco. If the data cannot be confirmed, the bank is notified, she said.

“Fraudsters sometimes mix real data with fabricated data to create a false identity,” she says. You may be asked to provide additional documents to prove who you are, such as a copy of your driver’s license, or this may result in a denial.

If you believe that you may have listed incorrect data on your request by mistake, consider reapplying.

Your bank may have confirmed who you are, but refused to open an account due to a record of unpaid bank charges or overdraft charges, for example. Banks rely on consumer information agencies such as ChexSystems or Early Warning Services to obtain information on applicants’ banking history. When this information leads to a refusal, you have the right to receive a copy of your file.

The file could list unpaid debts from old accounts, the status of those debts (paid or unpaid) and whether a previous account was closed due to suspected fraud. You can use the information in the report to contact the previous bank and pay for overdue charges or dispute errors. You could also directly with the rating agency. To reach ChexSystems, call 800-428-9623. For early warning services, call 800-745-1560.

Chip Kohlweiler, vice president of security at Navy Federal Credit Union, says it’s also a good idea to check your financial background and personal information with organizations that audit firms might contact, including “entities like as credit bureaus, government agencies and utilities. “For example, you can retrieve your credit report to confirm its accuracy.

This may seem like an extra step to take, but it actually helps speed up the application process when the information about potential members is correct, he says.

It is probably difficult to get a bank account approved if you have a file with a consumer reporting agency. Additionally, young adults and recent immigrants may not have a banking history in the United States for these agencies to verify. This may mean that you can’t open a traditional account today, but it shouldn’t prevent you from accessing banking services. Here are some other options to consider.

Some institutions offer second chance checking accounts specifically for customers who cannot benefit from a traditional option. The alternative account may lack some features, such as overdraft protection or the ability to avoid monthly fees, but it gives customers the opportunity to develop a strong banking history. (Note that this option usually doesn’t involve applying for loans, so it won’t help you build a credit history.)

If you keep a second chance account in good standing for 12 months, your bank can convert it to a checking account. Once this milestone is reached, you may be able to shop for and .

If you live far from a branch or are worried about the monthly fees, be aware that you can access some , and they don’t require a minimum balance or monthly fee.

Many prepaid debit cards give you access to important banking features, such as direct deposit and electronic bank transfers to help you build an emergency savings fund. They are generally accessible to customers regardless of their banking history. Some of the top picks have low or no monthly fees and access to thousands of ATMs.

Not being able to open a bank account should not mean not being able to access banking services. Whether you resolve the account issue directly with the institution or choose to shop around, there are a number of solid financial services companies out there who would be happy to have your business.


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