checking

Why can't I open a checking account?

Don TaylorDear Dr. Don,
I was denied a checking account with a popular national bank because of negative, but true, information reported by ChexSystems. At about the same time in 2007, I was rejected after attempts to open accounts at a couple of other banks. I tried again in 2012 after I received my income tax refund, but was again unsuccessful. Is there anywhere for me to open a checking account? I have had a bad credit rating for several years. Adding to my problems, I cannot get new credit anywhere. I'd like to get a credit card -- and not just a prepaid card.

Please help me if you can.

Thank you,
-- Hortencia Hostage

Dear Hortencia,
I think there's reason for hope here, but there's some work for you to do. Negative banking information stays on your ChexSystems consumer report for five years. Just like credit reports, you can get one free consumer report from ChexSystems every year. You can see what in your banking history is causing problems.

The good news is that you likely qualify to join a credit union. Speak with a credit union about establishing a checking account. They might be able to help with the credit card you want as well.

Negative information about your history stays on your credit report for either seven years, or up to a decade after a bankruptcy filing. You need to see your credit reports to better understand what is happening. It's possible you lack an extensive credit history, and that is making lenders reluctant to extend you credit.

Anytime you apply for credit, the inquiry shows up on your credit report. These inquiries remain on your report for two years, but should only influence your credit score during the first year. Actively applying for credit hurts your chances of obtaining it.

A secured credit card can help you build a credit history when the card company reports a positive payment history to the credit bureaus.

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