How to Deal When Denied a Basic Bank Account
BY DEBBIE DRAGON
Bank accounts are a common part of one’s personal financial life but not everyone is eligible to open an account or maintain one they already have. There are a number of reasons you can lose access to a checking or savings account and in the event you do, it is important to research your options for a new place to put your money.
Why Have I Been Denied at the Bank?
It may seem logical to be denied at the bank for a personal loan or a mortgage but if you go in to a branch office or apply online to open a standard checking or savings account, know that you are not guaranteed service if the bank deems you unworthy. The bank will investigate your past activity and if you have a history of writing some rubber checks, been busted for fraud, or have a balance owed on past accounts due to overdraws, you may find yourself rejected.
This is not an uncommon occurrence. There are millions of consumers who have been denied a basic bank account. The information the bank uses to approve or deny accounts comes from a company known as ChexSystems. This company has been in existence for over 40 years and provides the background information on 300 million people. About 80% of banks across the country rely on ChexSystems for account approval (Read “Meet the 5 Faceless Companies that Control Your Money.”)
The consumer reports provided to banks contain:
Details about previous bank accounts closed due to fraud/abuse
- Any money owned on an account at the time it was closed that is still outstanding
- Details of payday loan history
- Summary of bounced checks on previous or current bank accounts
If you are unsure where you stand, you may want to request a free report from the company through their website, Consumerdebit.com. Each consumer had the right to request on free copy a year, much like the major consumer credit reports offered from the credit bureaus. Your credit score is also something else to be considered because while you may be able to get a bank account with a low score, you may be subjected to stricter limitations and higher fees than other account holders.