Contrary to what you may believe, the typical bank won’t just let you open a new checking or savings account on demand. No, just as there’s a process for getting approved for a new credit card or loan, there’s also a process that banks follow for approving or denying consumers for the aforementioned types of accounts. For example, a bank is going to look at your account history – and while the process isn’t quite the same as pulling your credit report and analyzing your credit score as a lender would do on a loan application – it’s similar in nature.
While opening any type of new bank account is generally easier and comes with a higher approval likelihood than loans or credit cards, there are still some situations where you may be denied. Denials usually occur because the reporting agency that the bank used to assess your past banking history showed several warning signs. These negatives may include the likes of bounced checks, unpaid overdraft fees, debit card abuse or even applying for too much in a relatively short period of time.
If you’re trying to open a bank account and your attempts come back unsuccessful, that doesn’t necessarily have to be the end of the road for you. You have options for proceeding and getting to the end goal. Here’s what to do:
Check Your Report
Remember, the bank is going to use a service to check your consumer report before making a decision on your account. Similar to how you’re entitled to a copy of your credit report at least once a year, you’re also entitled to a free copy of your ChexSystems report annually. Make sure you get it, assess it and see what factors may have led to your denial. If you notice any errors on your report, gather up any supporting documents and dispute the inaccuracies with the reporting agency. Like credit reports, these consumer reports often aren’t perfect – and some of the inaccuracies may include fraudulent activity and/or incorrect personal information.
Clean Up Your Consumer Behavior
If it’s easy to see why you were denied, then it’s time to put in the work to clean up any negatives. This can be as simple as settling any unpaid fees and contacting the appropriate entity to see if they can remove the negative item. After this has been performed, follow up with the bank to see if it will reconsider your account request or if you can file a new application.
Get a ‘Second Chance’ Account
If you’re still denied or anticipate you’ll be denied even after cleaning up your report, you might consider a “second chance” account. Banks offer these to consumers that have been denied traditional accounts as a way to help improve their status. While they may come with higher monthly fees or certain balance requirements, they can put consumers back on the road to positive banking history.