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Bank accounts, such as checking and savings accounts, are vital to a successful finance management.
Living without a bank account is very difficult and almost unimaginable, but the truth is, there are people who do not have bank accounts because of previous financial issues and bad credit status.
These issues make getting a traditional bank account impossible, and this is when second chance banks come into the rescue.
ChexSystems and Other Credit History Databases
Second chance accounts or fresh start accounts are created for customers who have been previously turned down by conventional banks due to some financial issues like bad credit status.
It seems a bit surprising how a bank determines if you have a bad credit status. Such thing is recorded in a history database like ChexSystems.
The ChexSystems is composed of a network of financial institutions, which reports financial information like mishandled accounts, etc.
This is how it works: if a checking account holder bounces checks, overdraws from his or her respective account for a number of times, commits fraud or identity theft, or stops using an account, which is previously overdrawn without paying for the accounts negative balance, the checking (and liked savings) account is considered delinquent.
A report will then be filed against the account holder to the ChexSystem, barring or blacklisting the account holder and preventing him or her to open a bank account for at least 5 years.
Enter The Second Chance Banks
Second Chance Banks are traditional and/or online banks that allow you to apply for a bank account. Typically, banks that offer second chance accounts do not consult the ChexSystems list.
Downside of such bank accounts is that the extra risk involved requires banks to charge higher fees (compared to fees for regular bank accounts).
List of Banks That Offer Second Chance Accounts
While most conventional banks do not accept applications for new accounts from people who are listed in the ChexSystems, there are some exceptions. The traditional banks listed below offer bank accounts to those who are blacklisted by the ChexSystems.
Traditional banks:
- Bank of Texas
- BBVA Compass
- National Bank of Kansas City
- Urban Trust Bank
Some online second chance banks:
- Marketplace Bank
- Netbank
- Frost National Bank
- Clarity Bank
Opening a second chance account is possible. Of course, there might be some restrictions, like preventing you to get credit for a checking account and things like that, but what’s more important is you have another chance to get back to your feet, financially. “Everyone deserves a second chance” is a saying that most people like to use, and this also applies to those who want a second chance in their financial status.
