How to Get a Bank Account if You’ve Been Denied

Almost everything else on this site works better with a bank account. Most lenders require one to apply. Direct deposit requires one. And not having one means paying extra for basic financial services - check-cashing fees, money orders, prepaid card loads. This page covers how to get an account (even if you've been denied), how to avoid fees that make accounts expensive, and how to use one without overdrafting. If you already have a working account, you may not need this page - see the budgeting guide for cash-flow management.

• Many lenders require or strongly prefer a bank account: payday, installment, and online lenders typically verify a bank account as part of the application. Without one, your borrowing options narrow to in-person cash-based lenders - which are fewer and often more expensive.
• Direct deposit saves real money: cashing a paycheck at a check-cashing service can cost $3–$10 or more per check. On biweekly pay, that adds up to $75–$250+ per year in fees just to access your own money. Direct deposit to a bank account is free.
• Bill paying is cheaper with an account: paying bills online or by debit card is free. Paying with money orders costs $1–$5 each. If you pay several bills a month with money orders, the fees add up quickly.
• A stable account can make later financial steps smoother: having an account with regular deposits and responsible use helps with direct deposit, bill pay, and applications that look at deposit-account history.

What many institutions ask for

Requirements vary by bank and credit union, so ask before you go. Most will need to verify your name, date of birth, address, and an identification number. Common documents include:

• Government-issued photo ID (driver's license, state ID, passport, or consular ID)
• An identification number - this can be a Social Security number, Individual Taxpayer Identification Number (ITIN), passport number, or other government-issued number depending on the institution. You do not necessarily need a Social Security number to open a bank account.
• Proof of address (utility bill, lease, official mail)
• An initial deposit - some accounts require $25–$100 to open, others require nothing

Where to open one

• Credit unions: often more flexible on requirements, lower fees, and more willing to work with people who have limited banking history. You may need to join first - many have easy membership requirements (live in the area, work for a certain employer, etc.).
• Online banks: many offer no-minimum, no-fee checking accounts. Application is usually online. May be a good option if local banks have high fees or minimums.
• Traditional banks: convenient for in-person access but often have higher fees and minimum balance requirements. Ask about their basic or entry-level checking account - it usually has fewer features but also fewer fees.

What to ask before you open

• Monthly maintenance fee and how to waive it (often waived with direct deposit)
• Minimum balance requirement
• Overdraft fee and overdraft policy - including how the bank handles checks, ACH payments, and recurring transactions
• ATM fees for using other banks' ATMs
• Whether the account uses ChexSystems or another checking-account reporting company

Why you might have been denied

Most banks check a checking-account reporting database - ChexSystems is the most well-known, but other companies like Early Warning Services may also be involved. These databases track banking history: bounced checks, unpaid overdrafts, accounts closed for cause. This is separate from your credit report - you can have decent credit and still be denied a bank account based on your banking record.

You're entitled to know why

If a bank denies your application based on information from a checking-account reporting company, they must give you a notice that includes the name of the company that supplied the negative information. Use that notice to see which reporting company was used, then request that specific company's report first - that's where you'll find what caused the denial and where to dispute any errors.

Check your report

You're entitled to a free report from ChexSystems and other checking-account reporting companies once a year. If there are errors - accounts that aren't yours, overdrafts you already paid, incorrect closure reasons - dispute them directly with the reporting company. The process is similar to disputing a credit report error. See CFPB's list of consumer reporting companies to find where to request your report.

Second-chance bank accounts

Many banks and credit unions offer "second-chance" or "fresh start" checking accounts specifically for people who've been denied a standard account. These accounts may have no ChexSystems check or more lenient criteria, though they sometimes carry higher monthly fees or fewer features than standard accounts. Many offer a path to upgrade to a standard account after 6–12 months of good standing.

Bank On certified accounts

Bank On is a national initiative that certifies bank accounts meeting specific consumer-friendly standards: low or no monthly fee, no overdraft fees, and low opening deposit. These accounts are designed for people who are unbanked or have been denied elsewhere. Use the Bank On locator to find a certified account near you.

Overdraft fees

Overdraft fees are the biggest account cost for low-balance customers - often $30–$35 per transaction, and multiple overdrafts can stack in a single day.

• Opt out of overdraft coverage: federal rules require banks to get your consent before enrolling you in overdraft coverage for ATM withdrawals and one-time debit card transactions. If you opt out, those transactions are simply declined instead of approved and charged a fee. Opting out is usually the better choice for low-balance accounts. Note: checks, ACH payments, and some recurring transactions may be handled differently - ask your bank how those are treated.
• Set up low-balance alerts: most banks let you set a text or email alert when your balance drops below a certain amount. This gives you time to adjust before a transaction overdraws your account.

Monthly maintenance fees

Many accounts charge $5–$15/month unless you meet a condition - usually maintaining a minimum balance or having direct deposit. Ask what waives the fee and make sure you'll consistently meet it. If you can't, look for a no-fee account - online banks and credit unions are more likely to offer these.

ATM fees

Using an out-of-network ATM can cost $2–$5 per transaction - your bank's fee plus the ATM owner's fee. Use your bank's ATMs or get cash back at a store when making a purchase (usually free). If you use an online bank, check whether they reimburse ATM fees.

Whether you're opening your first account or switching from check cashing and prepaid cards, the first month is the riskiest. These steps prevent the most common transition problems:

1. Open the account before you stop your current method: don't cut off check cashing or prepaid access until the new account is working. Open the account, set up direct deposit, and wait for the first deposit to clear.
2. Switch direct deposit: tell your employer to route your paycheck to the new account. This usually takes one pay cycle to take effect. Until it does, keep your existing method available.
3. Move automatic payments one at a time: if you have any autopay set up through a prepaid card or other method, move them to the new account after direct deposit is flowing. Move one at a time so you can catch problems before they stack.
4. Keep a small cushion during the transition: leave enough in the account to cover a few days of expenses beyond what's automated. The first month's timing isn't established yet - a small buffer prevents an overdraft before you've figured out the rhythm.
5. Set up low-balance alerts immediately: this is your early-warning system. Set the alert at a level that gives you time to react - $50 or $25, depending on your typical daily spending.