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 Dear
Debt Adviser,
My question is, if you pay off a charge-off and they change your credit report to say "charge-off paid in full" will my ability to get a checking account be renewed? Right now, because of this I am unable to get one. I am in the process of paying the debt and want to be sure that I can get an account somewhere once it's paid.
Thank you!
-- Amanda
 Dear
Amanda,
You are not alone. An estimated 40 million to
60 million people in the United States are unable
to access the basic financial services network
many take for granted. There is even a term to
refer to this group. They are called the underbanked.
Many have had problems with bounced checks and
are unable to open another account because of
their negative account activity being reported
to one of the national check reporting bureaus.
Some banks also check a consumer's credit report, which sounds like the case with you. If your checking bureau report is clear, the simple solution for you to open a checking account may be to choose a different bank that does not check your consumer credit report. However, if you want to open an account with the bank that has turned you down, the bank may change its decision once you have paid the charge-off. The only way to be sure they will open an account however is to ask them. A paid charge-off is still a negative, but by paying the debt you have demonstrated that you are willing to fulfill your credit obligations.
For those readers who, like Amanda, are having trouble opening
a bank account or are concerned about the process,
please review the following tips.
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Opening a bank account? |
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Take a class.
Visit www.getchecking.org
for information regarding classes that
you can complete for a fee that will
give you the skills you need to open
and keep a checking account. Many banks
will allow persons who complete the
class a second chance. |
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Open a savings account first.
To open a savings account you need only
have the minimum deposit amount. Use
the account responsibly for several
months and then approach the bank for
a checking account. Better yet, if you
are able, purchase a certificate
of deposit and ask that you receive
a checking account in return. |
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Find a bank that does not use national check reporting bureaus.
If you've had a bad experience with a previous checking account, find a bank that does not use the check reporting agencies. Not all banks use these specialty bureaus for new accounts. One resource you can check for banks in your state is CreditServicer.com. |
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Immigrant's dilemma
I'd like to take a moment to address those immigrants
(legal and otherwise) who do not have bank accounts.
This population pays high fees to cash pay checks,
wire money abroad and pay bills because they do
not have access to a checking or savings accounts
or choose not to use the banking system out of
distrust or fear. Many also run a great risk of
theft and loss because they keep large amounts
of cash in their homes and on their persons.
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Here are a few suggestions to guide you: |
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Use a Mexican or Guatemalan Matricula Consular.
Many banks will accept this identification to open a checking account. To qualify for this form of ID, applicants must have a birth certificate, a picture ID from their country of origin and proof of U.S. residency, such as a utility bill.
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Obtain
an Individual Taxpayer Identification
Number, or ITIN.
This number is issued by the U.S. Internal Revenue Service to foreign-born individuals who pay taxes but are not eligible for a Social Security number. An ITIN is an acceptable form of identification for opening a bank account.
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Consider a prepaid reloadable debit card.
Safer than cash and accepted in many
locations, these cards can be reloaded
directly from your employer or at many
other locations such as Western Union
and MoneyGram retail agent locations
and Green Dot locations such as Walgreens,
Radio Shack, CVS/pharmacy and Rite Aid.
Some have a MasterCard or Visa affiliation
and can be used wherever MasterCard
or Visa is accepted, even as an ATM
card and to pay bills online. |
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Good luck!
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