Submitting any kind of application to a bank means they have to run a series of checks on you. They do this so they can assess the risk you might pose to their business, and to ensure they can do business with you.
One system used by around 90% of banks is ChexSystems, which is a score based on your checking account history. ChexSystems keeps a log of checking accounts that have been closed for “high risk” reasons, such as late payments, violation of rules and regulations, and fraud. The more accounts you’ve had closed for high risk reasons, the lower your score will be. Having a low score makes it difficult to open a checking account with many banks, so here is a list of some of the top banks that don’t use ChexSystems.
Axiom offers something called second-chance banking, where they overlook your credit and ChexSystems scores, and any financial mistakes you might have made in the past. Their account features no minimum balance, a $10 monthly service fee, and the opportunity for a debit card if you’re approved.
United Bank doesn’t use ChexSystems, but potential customers are limited by their locations only being on the East Coast. They have a free checking account that includes no minimum opening deposit or monthly fees, mobile banking, and a free check card.
TD Ameritrade is a brokerage, so you need to make sure you have a brokerage account before applying. They don’t use ChexSystems at all, so this can be a useful option for those with a bad history. The bank reviews accounts individually, and will confirm their decision to you directly. Their account has no minimum deposit or monthly fees, and a free debit card.
Southwest Financial Federal Credit Union
This bank is based in Texas and offers a checking account that is ideal for those with a bad credit history. Their account includes a free debit card, no checks, mobile banking, the ability to pay bills online, and no monthly service fees.
Green Dot Bank
Green Dot uses a system of risk models to determine whether customers are eligible to open an account, and don’t use ChexSystems at all. The account comes with a pre-paid debit card that can be topped up at any time. There is a $7.95 monthly fee, and a card reloading fee of up to $4.95, but the card allows you to make free purchases online.
Caputal One 360 Checking
Capital One does use your ChexSystems history, but it isn’t the only factor considered. If you have good credit you will be in with a better chance of being accepted. Their account has no fees or minimum deposits, and entitles you to a debit card.
Having a bad ChexSystems score isn’t the end of the world because there are plenty of Non-ChexSystems Banks in the United States. All it means is you have to be a bit more patient with making applications, and do research before applying to a bank.