Banks not Using ChexSystems in 2022

[Honest Reviews]

Do you need a bank account but your application keeps getting denied? It’s probably because your credit report is negative. What you can do is find banks that don’t use ChexSystems and luckily for you, I have the best on my list. 

In this article, you’ll read my methodology, list of checking accounts for bad credit, buyer’s guide, benefits of having a ChexSystems-free bank account, and more.

 

Show more
Fact-checked

1. Chime

Chime can give you convenient online transactions via its user-friendly platform. It’s virtually free, but it does come with low APY and somewhat difficult cash deposits. Full Review

  • Convenient online transactions
  • Large ATM network
  • Virtually free
Visit Site

Show More

Chime can give you convenient online transactions via its user-friendly platform. It’s virtually free, but it does come with low APY and somewhat difficult cash deposits. Full Review

Features

4/5

Fees

4.9/5

Ease of Signup

4.8/5

Ease of Funding/Deposit

4/5

2. Axos

Axos gives its users full-service banking and provides them with high APY via its Rewards Checking. And while there are fewer fees, one slight issue is the lack of any physical branches. Full Review

  • Full-service banking
  • Fewer fees
  • Unlimited ATM fee reimbursements
Visit Site

Show More

Axos gives its users full-service banking and provides them with high APY via its Rewards Checking. And while there are fewer fees, one slight issue is the lack of any physical branches. Full Review

Features

4.5/5

Fees

4.9/5

Ease of Signup

4.5/5

Ease of Funding/Deposit

4.5/5

3. Varo

Varo offers a high savings APY of up to 2.80%, as well as highly functional banking. No minimum deposit is needed, though it has somewhat limited banking features. Full Review

  • High savings APY
  • Excellent customer service
  • Opportunity for expansion
Visit Site

Show More

Varo offers a high savings APY of up to 2.80%, as well as highly functional banking. No minimum deposit is needed, though it has somewhat limited banking features. Full Review

Features

4.5/5

Fees

4.9/5

Ease of Signup

4.5/5

Ease of Funding/Deposit

4/5

4. N26

N26 gives frequent travelers rewards, perks, budgeting features, robust in-app security... There are no monthly maintenance fees, but there are some negative reviews of its customer service. Full Review

  • International bank for frequent travelers
  • MasterCard available
  • Budgeting features
Visit Site

Show More

N26 gives frequent travelers rewards, perks, budgeting features, robust in-app security... There are no monthly maintenance fees, but there are some negative reviews of its customer service. Full Review

Features

4.5/5

Fees

4.9/5

Ease of Signup

4.9/5

Ease of Funding/Deposit

4.7/5

5. First Convenience Bank

First Convenience Bank is a great option if you’re after banks that don't do credit checks for a checking account. The bank's wide range of lending options is a big bonus. This bank is ideal for those looking for a guaranteed checking account despite having bad credit. With a Power Checking account, you can manage your money without paying a monthly maintenance charge. Full Review

  • Five checking accounts for bad credit
  • Fresh start loans
  • No monthly service charge for clients 55 and over
Visit Site

Show More

First Convenience Bank is a great option if you’re after banks that don't do credit checks for a checking account. The bank's wide range of lending options is a big bonus. This bank is ideal for those looking for a guaranteed checking account despite having bad credit. With a Power Checking account, you can manage your money without paying a monthly maintenance charge. Full Review

Features

★★★★★ 5/5

Fees

★★★★☆ 4/5

Ease of Signup

★★★★★ 5/5

Ease of Funding/Deposit

★★★★★ 5/5

6. Renasant Bank

Renasant Bank is great for people who want to do all of their banking through a single source that doesn’t use ChexSystems and has a strong connection to the local communities. Renasant is one of the few banks that don't check credit and can provide comprehensive banking needs all under one roof. Full Review

  • High APY
  • Limitless check writing
  • Student checking accounts
Visit Site

Show More

Renasant Bank is great for people who want to do all of their banking through a single source that doesn’t use ChexSystems and has a strong connection to the local communities. Renasant is one of the few banks that don't check credit and can provide comprehensive banking needs all under one roof. Full Review

Features

★★★★☆ 4/5

Fees

★★★☆☆ 3/5

Ease of Signup

★★★★★ 5/5

Ease of Funding/Deposit

★★★★★ 5/5

7. TD Ameritrade

With quality trading platforms, $0 commissions on online stock, options, and ETF trades, and a vast variety of mutual funds, TD Ameritrade caters to both active traders and novice investors looking to avoid ChexSystems Full Review

  • No account minimum
  • Increased FDIC insurance coverage
  • Free check writing
Visit Site

Show More

With quality trading platforms, $0 commissions on online stock, options, and ETF trades, and a vast variety of mutual funds, TD Ameritrade caters to both active traders and novice investors looking to avoid ChexSystems Full Review

Features

★★★★☆ 4/5

Fees

★★★★★ 5/5

Ease of Signup

★★★★☆ 4/5

Ease of Funding/Deposit

★★★★★ 5/5

8. Bank of America

Bank of America’s second chance banking offers to waive certain fees for students. It’s easy to use, has a great budgeting tool, and low fees overall. However, there’s no interest to be earned. Full Review

  • Budgeting tool
  • Great reputation
  • Low fees
Visit Site

Show More

Bank of America’s second chance banking offers to waive certain fees for students. It’s easy to use, has a great budgeting tool, and low fees overall. However, there’s no interest to be earned. Full Review

Features

4.7/5

Fees

4.8/5

Ease of Signup

4.8/5

Ease of Funding/Deposit

4.5/5

Top Non-ChexSystems Banks

Chime
Chime
Chime

Great for Those in Need of Instant Banking Access

Visit Website
  • User-friendly
  • Convenient online transactions
  • Virtually free
  • Large ATM network
  • Low APY
  • Difficult cash deposits

Overview

Chime is one of the financial institutions that don’t use ChexSystems and which offer online banking for individuals with poor or bad credit. It’s best for you if you need instant access to banking but have a negative ChexSystems report.

It’s an internet-only bank that’s perfect if you love the convenience of online and mobile banking. Chime’s banking accounts are great for bad credit because you can build creditworthiness despite negative ChexSystems reports.

Accounts

Chime bank offers the possibility to open more than one type of online bank account for bad credit i.e. you can open a spending, savings, or credit builder account alongside great features.

  • Spending Account comes with a Visa debit card and doesn’t have monthly account fees or minimum balance requirements. The best thing about it is its Round Up feature which rounds up the fee to the nearest dollar and transfers the sum to your Chime savings account. 
  • Savings Account comes with an Automatic Savings feature, no minimum balance requirement, and no maximum interests earned. 

Credit Builder is available through their secured credit card which comes without annual fees, interest, or minimum deposit requirement. However, to be eligible for this online checking account for bad credit you will need to have a Chime spending account with a minimum of $200 qualified deposit within 1 year of your application.

Features

Here are some of the standout features Chime offers:

  • Free debit card replacement
  • A 0.50% APY on its savings accounts
  • FDIC insurance of up to $250,000, to keep your money safe
  • Mobile Payments available through Apple Pay and Google Pay
  • Free-fee overdraft with SpotMe
  • Access to over 60,000 fee-free ATMs
    No foreign transaction fees
  • Safer Credit Building to automatically pay your bills on time
  • Credit bureaus reporting 

Ease of Use

To open an account with the Chime noChexSystems bank, visit their page, and supply your basic information. You can deposit money into your account via direct deposit or mobile deposits. It doesn’t allow wire transfers, however. For direct deposits, you must go to a Green Dot location, where you might incur some fees.

Fees

Unlike many other ChexSystem-free banks, the fees at Chime are virtually non-existent. There’s no minimum initial deposit, and the checking accounts don’t charge any monthly maintenance fees or foreign transaction fees. There aren’t any ATM fees for in-network use, although fees may apply for out-of-network ATM withdrawals. The APY, which lets you grow your account over time, is 0.50%.

Customer Satisfaction

Although Chime has a modest rating of 2.6 stars on ConsumerAffairs it does offer a lot more to its clients. Satisfied customers praise the online cash checking feature and the option to block your card online if you’ve misplaced it. All this without any fee. The negative comments mention issues with security.

Competition Overview

Chime wins over the competition with the number of features at no charge that come with the checking accounts for poor credit

It falls short with its APY which is somewhat lower than what some of the competitors offer.

Read the full review of Chime, here.

Axos
Axos
Axos

Great Full-Service Banking

Visit Website
  • Full-service banking
  • High APY
  • Fewer fees
  • Unlimited ATM fee reimbursements
  • No physical branches
  • Lower certificate of deposit rates

Overview

Axos is another online-only bank that charges low fees and offers a variety of checking accounts placing it among the top banks for people with bad credit

Axos is a publicly-traded company formed in 2000 with over 1,000 employees. It’s among the longest-lived online banks that offer full-service banking for individuals and businesses.

Accounts

Axos offers a great variety of personal accounts under checking and savings accounts.  

  • Checking accounts have 3 plans: Essential Checking, Rewards Checking, and Cashback checking that come with no maintenance fee and unlimited domestic ATM reimbursements for all. They differ only in the APY, the overdraft fees, and the minimum required balance. Axos also offers a First Checking account for teens and Golden Checking accounts for people over 55. 
  • Savings accounts plans include High Yield Savings, Certificates of Deposit (CD), IRA/Roth Savings, and High Yield Money Market that come with great features such as FDIC-insurance, high APY, check-writing, etc. 

Features

Axos Bank accounts come with excellent features, the best of which are:

  • Unlimited domestic ATM fee reimbursement
  • Biometric authentication
  • Virtual financial assistant
  • Mobile app
  • FDIC insurance for up to $250,000
  • A Personal Finance Manager
  • Up to 1.00% cashback on Cashback Checking accounts
  • Up to 0.61% APY on their Savings Accounts
  • Real-time updated on account activity
  • 24/7 customer support

Ease of Use

You can open an account with Axos Bank through its website. Simply provide personal information such as your mailing address and Social Security number. You must also provide a valid driver’s license or state ID.

Fees

If you are looking for an almost free online checking account for bad credit, Axos does away with many fees. For most of the accounts, there’s no monthly service charge, overdraft fees, or insufficient fund fees, making it an ideal online bank if you want to avoid hefty fees. You can also get certificates of deposit, loans, and investment options. 

It’s a great non-traditional banking option if you have poor or bad credit. With its Rewards Checking, you can gain rewards totaling 1.25% APY. There’s also unlimited ATM fee reimbursement. 

When you use their checking account for bad credit, you can get the highest APY by having monthly direct deposits of $1,000 and using your debit card for at least 10 transactions

Customer Satisfaction

Axos Bank has very few customer reviews on online reviews platforms. That’s why the rating of 1.9 stars from only 16 reviews on Trustpilot should be taken with a grain of salt. The unsatisfied customers report accounts being restricted and unhelpful customer service. The satisfied customers, on the other hand, praise the great variety of accounts to pick from and the features that come with them. 

Competition Overview

Axos Bank has more checking accounts to pick from than most other banks. However, Axos doesn’t openly specify whether it offers an online checking account with no ChexSystems but as can be inferred from the online reviews even if it does use ChexSystems, it doesn’t affect the customer’s eligibility greatly.

Read the full review of Axos Bank, here

Varo
Varo
Varo

Highly Functional Banking

Visit Website
  • No initial deposit
  • High savings APY
  • Opportunity for expansion
  • Customer support could be better
  • High-yield APY only available to Gold Members

Overview

Varo is one of the greatest ChexSystems-free banks that offer little to no fees and convenient transactions. If you’ve been denied by ChexSystems banks and you need highly functional banking, then Varo is for you.

Accounts

Varo offers its clients second chance checking accounts as a standard online checking account and an online savings account with an option to automatically transfer money from the standard account to the savings account and an option to save change from round-up purchases.

Varo Believe is a credit-building account that enables clients to build their credit at their own pace.  

Features

With Varo features, you can:

  • Deposit money via mobile or direct deposit via Green Dot Reload 
  • Withdrawals can be made by making debit card purchases
  • Transfer money to another Varo user or another external account
  • Free paper check mailing
  • Save Your Pay for automatic savings
  • Save Your Change for saving the change from round-up bills
  • Varo Advance to stretch your paycheck
  • Earn up to 5% APY
  • Earn up to 6% cashback by using Varo Believe card or Varo debit card
  • No fees on foreign transactions with Vero Believe
  • Get your good spending habits reported to the three major credit bureaus
  • Free credit score monitoring

Ease of Use

Just like most of the banks that offer second chance accounts,  there’s no minimum deposit amount required to open an account with Varo Bank. You can sign up via your phone and submit your Social Security number. You can open an account even if you’ve been denied a checking account due to your bad credit history. 

A little glitch in the ease of use is that you can only deposit cash via third parties that may charge their own fees but if you have the option of direct deposits, this won’t be a problem. 

Fees

As a no-ChexSystems online bank, Varo doesn’t charge any monthly, overdraft, or foreign transaction fees.

It also charges no fees when you use any of its 55,000 Allpoint ATMs, though you must pay $2.50 for out-of-network ATM transactions. They offer no APY for regular bank accounts, but you can get up to 3% APY with their savings accounts.

Customer Satisfaction

Varo Bank has a very nice rating of 4.4 stars on Trustpilot. Customer reviews state that banking with Varo is easy and free of charge. 

On the negative side, they say that their customer service could be improved. 

Competition Overview

Using Varo Bank’s online checking account with no ChexSystems comes with a lot of benefits among which its easy banking service and great mobile app stand out the most.

With so many great things to offer, Varo Bank’s customer service could be improved to reach its standards. 

Read the full review of Varo Bank, here.

N26
N26
N26

Flexible Banking Options

Visit Website
  • International bank for frequent travelers
  • Mastercard available
  • Offers rewards and perks
  • Budgeting features
  • Negative customer service reputation
  • Signup issues

Overview

N26 is an app-based bank headquartered in Europe that services international clients. It’s among the top-rated ChexSystem-free banks if your credit rating is poor but you travel quite often and need flexible banking options.

Accounts

N26 offers only one account that comes with an abundance of great features. You can create additional sub-accounts where you can put money aside as savings. 

Features

As one of the banks not using ChexSystems, it’s a great option if you’ve got bad credit. You can:

  • Shop online with the virtual N26 card
  • Enjoy deposit protection on all accounts
  • Round-ups are deposited to your savings account
  • Make international payments with Wise
  • Limited or unlimited free ATM withdrawals (in the Eurozone only) depending on your account
  • Use your virtual Mastercard to withdraw money from NFC-enabled ATMs
  • Use the Insight feature to track your spending habits
  • Get 0.1% cashback on all purchases with the N26 Business account
  • Different types of travel insurance available on higher tires

Ease of Use

Signing up takes less than 8 minutes, and you can do it through your phone or computer. Simply provide the personal information they need, and you’re good to go. You can also request a Mastercard from N26, and it arrives within 2 to 3 days of signing up, which places it among the top banks that offer instant online checking accounts for people with bad credit.

Fees

N26 bank account comes with no ChexSystems, no minimum daily or monthly account balance, and no monthly maintenance fees. It is a Europe-based online bank, but there are no foreign transaction fees when you travel overseas. The best thing is that aside from the free in-network ATM withdrawals, you get 2 free out-of-network ATM withdrawals per month. 

Customer Satisfaction

N26 has a great reputation on review platforms, although it has a rating of 3.9 stars on Trustpilot. Customers from all over the world appreciate its no-fee accounts and the fast signup process although some customers did report being unable to verify themselves. 

Competition Overview

N26 wins over the competition thanks to its easy banking and the free online checking accounts without ChexSystems

Yet, the issues in the signup process need to be resolved before the service is perfect.

Read the full review of N26, here.

First Convenience Bank
First Convenience Bank
First Convenience Bank

Multiple Banking Options

Visit Website
  • Five checking accounts for bad credit history
  • Fresh start loans for customers with overdraft accounts
  • No monthly service charge for clients 55 and over
  • Limited to Texas, Arizona, and New Mexico
  • Maintenance fee is a bit high for other clients

Overview 

First Convenience Bank is a subsidiary of First National Bank Texas. This financial institution dates back to 1901 and has provided clients with a wide range of banking services, including checking accounts and mortgage loans, for more than a century. The bank doesn’t use ChexSystems to assess who is eligible to create an account.

Accounts 

First Convenience Bank does not use ChexSystems for their checking accounts for bad credit, which include: Power Checking, Checking with Interest, President Select High Yield Checking, eAccount, and Power Stash

Features

Here are some of the features offered by First Convenience Bank:

  • Balances and banking activity check
  • Examine the history and details of your statement, including ATM and debit card transactions
  • Status of deposits and withdrawals check
  • Access to loan balance information and the ability to make payments on a loan
  • Over 400 ATMs available across Texas, New Mexico, Arizona and Arkansas
  • Online purchases with Apple Pay, Google Pay, and Samsung Pay
  • Remote check deposits with Mobile Check Deposit
  • Touch ID and Face ID security features available with mobile banking
  • Bill Pay
  • Stop payment on checks
  • ACH Origination Secure Internet Online Banking

Ease of Use 

For these checking accounts for bad credit history, the bank offers an advanced online and mobile banking platform. Once you’ve created a bank account by submitting proof of identity documents and the minimum deposit, you can sign up for their online banking, which is very straightforward. If you’re having trouble, the bank’s website has great tutorials on how to set up your account. 

Fees

To start an account online, you must deposit $20, however, there is no minimum deposit if you open an account in person at a branch location. This no-ChexSystems bank account type has a $12 monthly service charge, which is canceled for account-holders over 55. If you maintain a minimum daily balance of $100, use your debit card at least eight times each month, or set up at least $100 in monthly direct transfers, the bank will forgo the maintenance charge. There’s a $34 overdraft fee. 

Customer Satisfaction

The bank has a BBB rating of A+, and customers are happy with the bank’s account selection, but a few mention their dissatisfaction with the customer service. 

Competition Overview

First Convenience Bank is an excellent no ChexSystems alternative if you’re looking for multiple banking options.

However, First Convenience Bank is located only in three states: Texas, Arizona, and New Mexico, making it a very limited choice for a no ChexSystems bank.

Renasant Bank
Renasant Bank
Renasant Bank

Limitless Check Writing Privileges

Visit Website
  • Checking account with a high interest rate (certain criteria apply)
  • High-yield special CDs
  • Limitless check writing
  • High overdraft fee
  • Savings and money market accounts have low interest rates

Overview 

Renasant Bank does not employ ChexSystems, EWS, or Telecheck, so it’s worth investigating if you’re concerned that a bad banking past may prevent you from obtaining a checking account.

Accounts

Renasant Bank provides banking accounts for bad credit, as well as credit cards, wealth management, and online banking. It also offers HELOCs and conforming, FHA, Jumbo, VA, and USDA mortgages. Some of their no ChexSystems checking accounts include: 

  • Rewards Checking has an impressive APY of 1.51% and launches this option among the top interest-earning checking accounts. However, in order to apply, you have to make at least 10 debit card transactions, make a minimum of one direct deposit or ACH transfer per qualification cycle, and opt for receiving statements electronically. 
  • Student Checking is intended for students aged 15 to 25 years old. It has a minimal $8 monthly maintenance fee that you can avoid if you make at least 10 debit card transactions per qualification cycle (excluding ATM transactions) and receive monthly statements electronically.
  • Renasant Checking is a guaranteed checking account with a minimum deposit of $50. You get online, mobile, and physical access to the bank and are subject to monthly fees if you don’t opt for monthly eStatements and maintain a minimum daily account balance of $500.

Features 

Renasant Bank offers these features for their checking accounts:

  • A Mastercard debit card which comes with Zero Liability Protection
  • Easily move from your old account using Renasant Switch Kit
  • Easier record-keeping with return on canceled check images
  • Up to $20 per month ATM fee refunds (if requirements are met)
  • Rewards Checking account-holders get free mobile banking, online banking, and online Bill Pay
  • A comprehensive Rewards Extra Checking account

Ease of Use 

Mobile banking and free online Bill Pay are both available with these online checking accounts with no ChexSystems. To apply, you can fill out an application online which will take no longer than 10 minutes. All you need is your driver’s license and the routing number and account number available from a transactional account by another bank. This is mandatory for new Renasant Bank applicants. 

Fees

To open an account at Renasant Bank, you must deposit at least $50. Unless you sign up for eStatements or maintain a daily balance of at least $1,000, there is a $10 monthly service charge. Renasant Bank also charges a $36 overdraft fee. With their Bill Pay option, the first six online bill payments are free of charge, and each additional payment is $0.50.

Customer Satisfaction

Renasant Bank is not BBB accredited, however, it does score high on WalletHub, with an average score of 4.8/5 based on over 400 online reviews stating their satisfaction with the bank’s services. 

Competition Overview

With Renasant Bank’s online bank account for bad credit, when you match specific criteria, you can open a checking account with a high APY.

However, Renasant Bank’s physical ATMs and banks are only located in Mississippi, Alabama, Tennessee, and Georgia.

TD Ameritrade
TD Ameritrade
TD Ameritrade

Ideal for Banking and Trading on One Platform

Visit Website
  • Free tools and research
  • For beginners and advanced traders alike
  • No account minimum
  • Increased FDIC insurance coverage
  • Very low interest rate
  • Soft credit check

Overview 

With a $0 minimum, free tools and research, and various trading platforms tailored at both beginners and advanced traders, TD Ameritrade is hard to match. And yes, you can open a TD Ameritrade account online with no minimum deposit and bad credit.

Accounts

Although creating an account is subject to a soft credit check, TD Ameritrade will allow you to open a checking account without ChexSystems. You must first open a brokerage account before applying for a Cash Management checking account

A Cash Management checking account offers a debit card and free ATM withdrawals, free check writing, and free online bill pay. That way you have the freedom to access, spend, and manage your money the way you want to without worrying about ChexSystems or potential bad credit.

Features 

TD Ameritrade offers these features:

  • No minimum deposit
  • No minimum balance
  • No monthly fees
  • Free ATM withdrawals
  • Unlimited check writing 
  • Online Bill Pay
  • 100 free check reorders
  • FDIC Protection
  • Debit card issued by TD Bank

Ease of Use 

This online checking account for bad credit has mobile banking available and online application. All you’ll need to sign up is your Social Security number or Individual Taxpayer Identification Number (ITIN), and, if applicable, your employer’s name and address. You can download the TD Ameritrade mobile app to your phone or tablet and manage your account from wherever you go. You can check your balance, make a transfer, or make a payment with ease, and even deposit checks into your account. 

Fees

You won’t have to worry about monthly fees with a TD Ameritrade Cash Management account. This institution does not charge maintenance fees, regardless of your average daily or monthly balance or amount of direct deposits. The only fees that this bank imposes are $25 on outgoing wire transfers and the $25 Stop Payments on checks fee.

Customer Satisfaction

TD Ameritrade has an average score of 3.9/5 on ConsumerAffairs with clients saying that their customer service is very helpful and offers constant assistance. That said, some have had an unpleasant experience when opening their accounts. 

Competition Overview

When compared to the fee schedules of most other banks’ checking accounts for poor credit, a TD Ameritrade account shines since it has fewer and lower fees.

Bank of America
Bank of America
Bank of America

Perfect for Credit Score Building

Visit Website
  • Easy access
  • Budgeting tool
  • Great reputation
  • No interest earned
  • No paper checks
  • No overdraft offers

Overview

Bank of America is one of the best choices in the banking world for people with great credit scores. However, it also offers a second chance checking account called Advantage Safe Balance Account for applicants who have been denied by ChexSystems.

Accounts

Since Bank of America uses ChexSystems they offer only one account under the name Advantage Safe Balance Account for people with bad credit which comes with great features. 

Features

The Advantage Safe Balance Account comes with the following features:

  • Easy access through their website
  • Virtual assistant
  • 24/7 Total Security Protection
  • Fraud monitoring and card locking features
  • Secure payments with Zelle
  • Setting Savings Goals and Custom alerts
  • Personalized cash back deals and rewards
  • Mobile banking app

Ease of Use

To enjoy Bank of America’s second chance checking account for bad credit, go to its website and sign up for a Safe Balance Account. Provide your personal information, including your employment details and Social Security number. Then, submit your application.

Fees

This account charges only a $4.95 maintenance fee, and the minimum deposit is $25. You get a debit card and enjoy mobile transfers and online bill payment options. There are over 16,000 ATMs nationwide that don’t charge any transfer fee.

If you’re under the age of 18, a student, or if you are enrolled in the Preferred Rewards, the maintenance fee can be waived. And though it requires an initial deposit, there are no monthly balance requirements.

Customer Satisfaction

Bank of America has a positive 3.4 rating on ConsumerAffairs and a low rating of 1.3 stars on Trustpilot. To summarize both, they have loyal customers who have used them for years and say that Bank of America is very reliable with great customer service. The only complaints were about the high fees. 

Competition Overview

Bank of America has a well-established presence among banks that offer second chance accounts and enjoys a reputation as a reliable company with great perks for its clients.

However, the great benefits come with high fees that make it less affordable for some people.

What Are Checking Accounts for Bad Credit

When your bank account application gets denied because of bad credit, you can use alternatives. These are either banks that don’t use credit reports to screen applicants or banks that offer second chance accounts.

Also called demand accounts or transactional accounts, checking accounts let you make withdrawals and deposits using checks, ATMs, and e-debits. They offer high liquidity, but they don’t have the highest interests on deposits.

As opposed to regular banks, banks that don’t do credit checks for checking accounts often charge lower fees. In general, they function similarly to traditional banks. APY rates may differ, but their real advantage is that you have access to great banking despite having poor or bad credit.

Banks That Don’t Use ChexSystems – Buyer’s Guide

Even though by now there is probably at least one bank that has caught your attention, keep on reading below to find out what else you need to know when choosing a bank or a credit union without ChexSystems.

How to Get Approved for These Banks

The application process for accounts with such banks is straightforward and follows requirements similar to more traditional banks. Follow these steps when trying to get approved for an account:

1. Check the Bank’s Requirements

  • While banks might not perform a credit check on applicants, they do require things like government-issued IDs, social security numbers, addresses, and other personal information.
  • Always check what the bank needs from you before signing up to get approved.

2. Go Through Your Credit Report and Dispute Any Error

  • Most account denials happen because of poor credit ratings, which stem from less-than-perfect credit reports by the three main credit bureaus.
  • Before signing up with a bank without ChexSystems, go through your credit report. If you find any errors, dispute them. If you’re successful, you may end up being eligible for an account in bigger and more traditional banks.

3. Choose a Second Chance Bank Account

  • A second chance bank account is another alternative where banks with no ChexSystem or credit unions are willing to look past your poor credit.
  • Think of second chance bank accounts as the bare-bones version of standard accounts, with fewer features and a limited spending threshold.

4. Think About Using a Prepaid Debit Card

  • You might also consider using prepaid cards, which aren’t linked to a bank checking account or a credit union account.
  • Using this card, you deposit money in advance, and that’s what you spend when using the card.

5. Know Which Features You Want

  • When searching for what banks do not use ChexSystems, you should also consider what kind of features you want.
  • While features may differ from one account to another, ChexSystems-free banks often provide features similar to traditional banks. These features may include online banking, mobile deposits, and free in-network ATM usage.

6. Use the Account Wisely

  • Once you have the account, make sure you use it wisely. Avoid unpaid fees, overdrafts, and other things that can affect your credit report negatively.
  • Eventually, you’ll be able to upgrade or switch to a standard bank — when you finally have a better credit rating.

Benefits of a Checking Account With Bad Credit

A bad credit checking account lets you manage, store, or spend your money when banks deny you a standard account.

  • You can forego credit checks, as banks off ChexSystems are meant for people with poor or bad credit history. Acquiring a credit card to use for purchases or transactions in-store or online is also easy.
  • You can benefit from little to no fees. Initial deposits, maintaining balances, and foreign transaction fees are generally cost-free in such accounts. This can help rebuild your credit rating after a bad credit report since you can stop worrying about unpaid fees.
  • You’ll also withdraw cash over the counter or through ATMs and set up direct debits and standing orders, which are convenient and easy to do.

Banks with second chance checking accounts and the ones with no ChexSystems also provide access to online banking features, as well as real-time transaction alerts. Similar to traditional banks, these accounts also offer additional features and budgeting tools.

At the same time, such an account allows you to establish a better relationship with a financial institution. This can help you down the road if you’re thinking of applying for a mortgage from other loan providers.

Downsides to Consider 

Meanwhile, there are also some downsides. For instance, as opposed to a standard checking account, accounts for bad credit may feature overdraft restrictions. That means you can only spend what’s in your account and the bank won’t cover any exceeding limits.

If you choose not to have an online checking account for bad credit — or any account at all — you won’t be able to:

  • Set up direct debits and standing orders – many firms offer discounts to direct debit buyers. Without a bank account, you’ll always pay in full. Another reason for paying for goods or services using direct debits is because it’s convenient and fast.
  • Improve your credit rating – if you don’t have a bank account, your credit rating will be negatively affected. Account activity, for example, making regular payments using direct debit can improve your credit score as reflected in consumer reports.
  • Access other sources of funding – without a bank account, you might not be eligible to access other funding sources in case you need them, such as mortgage and loan providers.
  • Guarantee cash security – dealing purely with cash all the time isn’t always safe. You also won’t benefit from fraud protection. Reporting cash-related fraud, or any other suspected fraud, will likely take a longer time to resolve and you won’t be reimbursed. When it comes to identity theft, with some companies you can file a dispute over the phone.

Overall, having a checking account for bad credit lets you enjoy convenient banking services while also rebuilding your creditworthiness. This way you can improve your credit rating quickly.

Alternatives to Bank Accounts

If you can’t get approved for bank accounts, other alternatives include:

Credit Unions

No ChexSystems credit unions are a great alternative to bank accounts as they have lower fees, higher savings rates, and a more personalized approach to your financial situation. At the same time, they’re great loan providers with easier terms than large, impersonal banks. Although they have fewer financial services, they generally operate in the same ways as banks do. They’re also federally insured by the National Credit Union Share Insurance Fund, which is the equivalent of FDIC insurance for banks.

Debit Card-Based Accounts

These are cards not attached to any bank accounts. They’re fee-based prepaid cards that allow you to “reload” money into them. With these cards, there’s no risk of uncollected overdrafts. You’ll only be spending the money you’re putting into the account, so it’s a great way to manage your budget. Some cards can also load your paycheck directly into them, fully eliminating the need for a bank account. Just be careful with the fees, such as purchase fees, loan fees, monthly fees, and inactivity fees.

Secured Credit Cards

A secured credit card is a good way to access funding while building your credit. You deposit a payment upfront, and the issuer will hold it in case of default. Although secured cards have low credit limits and high-interest rates, they’re a good way to improve a bad credit history if you pay responsibly every month. These are available both from traditional banks and banks for bad credit.

Money Market Funds

Money market funds offer accounts with higher yields than traditional banks. These funds also ensure that their price remains at $1 per share, so you’re technically not losing any money in them. However, the downsides include being uninsured by the FDIC and paying a minimum initial deposit, which can be hefty.

Online Banks

Online-only banks have less overhead. Just like banks that do not use ChexSystems, they often look beyond a negative ChexSystems report. They also often have lower fees and better rates than your average banks. With online accounts, you can perform many of the functions of a standard bank account, only easier. Transactions can be done via a mobile app, where you can deposit, transfer, or purchase items without ever touching an ATM or going inside a banking office.

Finally, if none of this sounds too enticing, our best tip is to get the help of credit repair companies like Credit Saint (read our full review here). Once your credit is looking better, you’ll be able to open a regular account.

What’s the Difference Between non-ChexSystems and Second Chance Banking? 

When choosing between no-ChexSystems banking and second chance banks, it pays to know the difference.

No-ChexSystems Banks 

Banks that don’t use ChexSystem may verify new accounts using other consumer reporting agencies. For instance, BBVA doesn’t use ChexSystems, but it uses Early Warning Services, which allows them to verify an applicant’s account.

With no-ChexSystems banks, you can avoid fees associated with traditional accounts. Since they’re FDIC-insured, your money gets the same fraud protection as when you store it in a standard account. Automatic payment features are also available.

The downside to this kind of banks is that they are usually difficult to come by. Although we’ve listed the best banks here, 90% of other banks still use ChexSystems.

Many banks that don’t use ChexSystem are also online-only companies, meaning they don’t have physical locations. In this case, there’s no in-person support when you need it. You’ll do everything online, which can be good or bad depending on the issue you’re facing.

Second Chance Banks 

Meanwhile, second chance banks use ChexSystems to screen customers. However, they’re willing to offer a fresh start and a checking account even though the customer is denied the standard account. These accounts are ideal for people with past banking problems. Credit card companies also offer this feature.

Second chance accounts come with fees, such as monthly minimums. The rewards and features, which you can find in standard checking accounts, will also be limited.

At the same time, banks that offer second chance checking with no opening deposit may ask you to take a course on money management. This can take time and may not be practical depending on your situation.

Both second chance banking and no ChexSystems banks offer a great alternative for people with bad credit.

2022’s Banks That Don’t Utilize Chexsystems – At a Glance

How I Created This List – Methodology

To ensure that I’m listing only the best banks that do not use ChexSystems, I analyzed the following features:

Account Requirements and Ease of Signup

Non-ChexSystems banks often come with account requirements such as providing your Social Security number and/or other government-issued IDs, a minimum deposit, etc. I also checked how easy or difficult it is to open an account with each bank.

Typical Approval Time

I compared the time it takes for banks to process applications. As a non-traditional banking option, applying for a non-ChexSystems account should be quick and straightforward.

Banking Services

These services may include savings account offers, upgrades, deposits and withdrawals, check writing, and other features.

Fees 

I compared how much you’ll spend for using each bank’s services monthly. These monthly minimums are often higher in standard accounts, while those that don’t use ChexSystems have lower fees. Also, I included banks that charge little or no overdraft fees because having a negative history of overdraft fees can result in a poor credit rating.

ATM Network and Fees

The ideal bank should have ATMs available nationwide to make it easier for you to withdraw or deposit money. I also checked their in-network and out-of-network fees.

Cashback Rewards

I checked which banks offer cashback rewards and how much you can get back every time you use your bad credit checking account.

Mobile App

Every online bank with no ChexSystems should have apps with mobile check deposits or card lock/unlock features. I compared which banks have more robust app functionalities than the others.

Daily Deposit Limit

Some of these banks’ daily deposit limits may also differ from traditional banks. I checked which ones have higher limits and which ones have more flexible setups.

Fraud-Free Record

I found banks that have the cleanest records in terms of fraud accusations or reports. 

Regular and Second Chance Savings Accounts

I checked which of these banks offers the best rates in terms of savings and APY for regular and second chance savings accounts that let you have a fresh start despite negative ChexSystems reports.

Customer Support Service

I also investigated which banks have the best (or worst) customer support reputations.

Customer Reviews 

Finally, I looked through what customers say about the banks, what they like and dislike, as well as the strengths and the points for improvement.

Conclusion

A no-ChexSystems bank can offer useful features that help you build a higher credit rating, while second chance accounts allow you to start over. Apart from them, credit unions and debit card-based accounts are also good alternatives. A credit union checking account for bad credit gives you a more personalized banking experience, but card-based accounts let you monitor your expenses more properly.

FAQ

What is ChexSystems?

ChexSystems is a banking reporting agency that collects information about your financial history, specifically the problems you’ve had with checking and savings accounts. Banks use their report when deciding whether to approve your account application or not. A negative ChexSystems report is a common reason for application denials.

What are the cons of using an online bank with no ChexSystems?

The downsides of using online banks without credit checks include having limited account capabilities. Their businesses are done mostly online, so you’ll also receive limited customer support in case you need in-person services.

Can I open a bank account if I owe another bank money?

It depends. With some banks, you can open an account even if you owe another bank money. However, you may not be able to get your preferred account type. Unpaid fees appear in consumer reports. You can renegotiate with the bank for a second chance account if your application is denied.

What is the best free online checking account for bad credit?

The best free accounts for bad credit are offered by BBVA, Chime, GoBank, Axos, Wells Fargo, and Bank of America. Each of them offers great account features and rewards to help you recover from bad credit through their second chance checking account options.

How do I clear my ChexSystems?

The fastest way to clear your ChexSystems records is to pay all debts and fees. If you think there are errors in the report, dispute them accordingly. Banks that don’t use ChexSystems are often willing to overlook this, but clearing your record is necessary to become eligible for better account types.