Episode•May 16, 2023•10 min

Overcome Financial Barriers: How To Handle Banking When You Can’t Open An Account | Ep. 229

Are you having trouble opening a bank account? Tiffany understands, and she's here to help! She explains the most common issues that might be preventing you from getting an account, like bad credit history or previous closures, as well as several solutions. From second-chance checking accounts to prepaid cards and improving your Chexsystems score, Tiffany has ideas for making the process easier. Check out the full article on her blog and contact her with any questions. Every Tuesday, Tiffany answers one of your submitted questions. To submit a question for an upcoming episode, visit here: https://www.moneytalkwitht.com/asktiffany Links I Was Denied: 6 Alternatives When You Can’t Open A Bank Account This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

1
Banks use ChexSystems to screen applicants, similar to credit bureaus
Previous account closures with unpaid balances are reported to ChexSystems
Bad credit history can also prevent account approval
Every bank application typically runs through this system
2
Second-chance checking accounts are designed for people with troubled banking histories
Available at many major banks
Help improve financial record to eventually qualify for regular accounts
Research requirements and fees before opening
3
Prepaid cards and check-cashing stores offer short-term alternatives
Prepaid cards may have high per-transaction fees
Check-cashing stores help with bill payment and cashing checks
These are temporary solutions with high costs, not long-term fixes
4
Improving your ChexSystems score is key to long-term banking access
Learn how the system tracks banking history
Focus on positive banking relationships going forward
Eventually allows opening regular bank accounts

Intro

Tiffany addresses the often-overlooked issue of being denied a bank account and provides practical solutions for listeners facing this challenge.
Tiffany is a financial coach and host of the Money Talk with Tiff podcast who helps clients navigate banking barriers and improve their financial situations.

– Why Bank Account Denials Happen

Tiffany explains that banks run applications through systems like ChexSystems, and previous account closures with unpaid balances or bad credit history can result in denial.

If you had previous account closures, like for instance, if you were in the negative a lot, well, quite a bit, and they said, you know what, we're closing your account and you never paid that balance, that could affect you from opening a bank account.

– Second-Chance Checking Accounts

Tiffany recommends second-chance checking accounts as the best short-term solution. These accounts are specifically designed for people with troubled banking histories and are available at major banks.

This is the best thing to do out of this list, in my opinion, and that is to open a second chance checking account.

– Cosigner Option and Check-Cashing Stores

A cosigner with good financial standing can help open an account, though Tiffany warns this can complicate relationships. Check-cashing stores offer another alternative for cashing checks and paying bills.

This is probably going to be the only time where you will hear Tiffany recommend a check cashing place because I do not agree with them at all.

– Prepaid Cards as Alternatives

Prepaid cards can serve as temporary banking solutions, though users must carefully review fee structures as some charge for every transaction.

I've seen prepaid cards where they charge you every time you do a transaction. It doesn't matter if it was an ATM or not.

– Improving Your ChexSystems Score

Tiffany emphasizes learning about ChexSystems and working to improve your score, which tracks your banking history similar to how credit bureaus track credit.