What to Do When You Can't Open a Bank Account - NerdWallet (2024)

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What to Do When You Can't Open a Bank Account - NerdWallet? ›

If you are denied a bank account, verify your application details, review consumer reporting records and consider banking alternatives. Margarette Burnette is a NerdWallet authority on savings, who has been writing about bank accounts since before the Great Recession.

Common reasons consumers are turned down for a bank account include a history of overdrafts, unpaid bank fees or suspected fraud. Applications can also be denied due to mistakes on one's checking account report. If you've been denied a bank account, ask the bank why this happened.

This might include paying off debts, maintaining good financial behavior, and rebuilding creditworthiness. Once the debts are settled or resolved, the blacklisting or associated fees may eventually expire or be removed, depending on the bank's policies and credit reporting regulations.

You can be denied an account if you're in debt to another bank because of an overdrawn account or overdraw your account too often.

Reasons You Can Be Denied a Checking Account

Excessive overdrafts or nonsufficient funds incidents. Unpaid fees or negative account balances, whether from an active or closed account. Suspected fraud or identity theft. Applying for too many bank accounts over a short period of time.

Second chance bank accounts are designed for individuals whose banking history prevents them from opening a regular checking account. This may include individuals who have been denied an account due to too many overdrafts or unpaid fees.

If you've had banking problems, ChexSystems will alert other banks about them for up to five years. Opening new accounts could be tough. Prepaid cards or second-chance checking could help.

Your past financial behavior put you on a no-account list. Consumers with a history of unpaid overdraft fees or bounced checks may be blacklisted from opening a new deposit account.

Wait until the record drops out of the database

Reported information usually is removed from your ChexSystems file after five years. Until then, you might be able to open a second-chance checking account. These accounts are designed for people who have a record with consumer reporting agencies such as ChexSystems.

Once you have been blacklisted you will have a bad credit record for anything from 2 – 10 years, depending on the type of listing that you have against you, but even after this period of time, a judgment can be issued against you if you have not paid the money that you owe.

What to do if you are refused a bank account? ›

If you're refused a basic bank account

If your application is declined, ask why. You should be told the reason unless your bank suspects you of fraud or money laundering. For example, you could be refused if: you don't agree to a credit check – although you don't have to pass one.

To check if you are blacklisted, you can receive an annual complimentary credit report. This can be obtained from any of the prominent credit bureaus in South Africa. The report provides information on your credit score and allows you to review for any potential inaccuracies.

How long does negative information stay on ChexSystems and/or EWS consumer reports? Generally, negative information remains on ChexSystems and/or Early Warning Services (EWS) consumer reports for five years. Under the Fair Credit Reporting Act, certain negative information may be reported for up to seven years.

Once a bank account is closed, it usually can't be reopened. You'll have to open a new bank account with your institution or bank somewhere else. Some banks have second chance bank accounts, which allow you to open a bank account regardless of whether you have a negative banking history.