Have you ever attempted to open a bank only to be denied? Banks look at your banking history when you apply to open a bank account. A bad banking history or bad credit can cause a denial. It can be difficult to conduct daily financial transactions without a bank account.
Why Banks Deny New Customers
Most banks use ChexSystems or Early Warning Services, both are consumer reporting agencies that keep track of your past bank history and activity. If you’ve had excessive overdrafts on your account or lots of bounced checks, you may get blacklisted by ChexSystems or Early Warning Services, resulting in a denial from a bank.
Banks use information provided by ChexSystems or Early Warning Services to assess how risky it is to open a new account for you. Any history of not paying bank fees or irresponsible account management, can result in getting blacklisted.
What is Second Chance Banking
Second Chance Banking gives people in ChexSystems or Early Warning Services a second chance to prove they can manage a bank account responsibly. Some second chance banks do not use ChexSystems or EWS while others may use it but over look past mistakes.
You can use a second chance bank account to get back into good standing with banks, and eventually “graduate” your way back to a regular checking or savings account.
Here are second chance banks worth taking a look at in 50 States nationwide: https://bankiful.com/second-chance-banking
How to Avoid being reported to ChexSystems
The best way to avoid being reported to ChexSystems or Early Warning Services is to avoid a negative balance. Always balance your account and monitor spending on your bank debit card. Only spend money that you have in the account. Never deposit checks you know may not be good. That would be considered fraud and definitely land you in Early Warning Services and ChexSystems.