Getting a current account with bad credit

When you’ve had a bad run with money it can be daunting trying to get back on track, especially if you don’t think that you have any options. But the future’s not as bleak as staring into an empty wallet – there are options – you just need to know what’s out there.

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What options do I have?

Opening a standard current account means that a credit check will be run on you. If it comes back and shows that you don’t fit that particular bank’s criteria, then your application could be rejected. Perhaps you’ve defaulted on past loans and credit or even have a CCJ (county court judgement) against you. If it happens, it can be a horrible feeling, but take heart knowing that you aren’t the first and you certainly won’t be the last person to ever be turned away from getting a regular bank account.

If this happens, then you can opt for a basic account – these will give you similar but not all the same features as a standard account. Banks will differ slightly over what they offer, but on the whole, this is what you can expect from a basic account.

Features you’ll get  

Features you probably won’t get

  • Put money in and take money out
  • Set up standing orders and Direct Debits
  • You’ll usually get a debit card
  • Offers free banking (no monthly fee)
  •  An authorised overdraft facility
  • Interest paid on any credit in your account
  • Chequebook

Alternatives to basic accounts include credit unions that offer current accounts (not all of them do). Unions tend to be locally based so having access to one is pot luck dependent on where you live. Or if you receive certain state benefits you can ask for a Post Office card account to be opened on your behalf (the request has to come from the department issuing your benefits). The last option is a fee paying bank account where you pay to have an account. There are a few out there that don’t undertake credit checks but this can be an expensive option – especially if you’re already in a pickle with money.

Am I eligible for a basic bank account?

Basic bank accounts are aimed at anyone struggling to open a standard bank account and sometimes they’re known as bank accounts for bad credit. Most people are eligible for a basic bank account; unless you’ve been convicted for fraud, in which case you may find it more difficult as banks reserve the right to not give you an account if you have a fraud conviction.

Some banks will automatically suggest a basic bank account if you don’t meet the requirements for a standard current account. However, if you do meet the criteria for a standard bank account then you might not be able to get a basic one.

In order to open one, you’ll need a form of ID such as your passport or photographic driving licence and proof of where you live like a utility bill or benefit book.

piggy bank

Upping your credit rating

Like anything, your credit rating can be improved – consider:

  • Budgeting to make sure you stay within your means and don’t end up constantly over your overdraft or missing repayments.
  • Check your credit report for free at Experian, Callcredit and Equifax and ensure the details they have on you are correct.
  • Sever any financial ties you have with ex partners or housemates so that their credit history doesn’t blemish yours.
  • Put yourself on the electoral register (find out more on your local council website) lenders like to see stability and verify you are who you say you are.
  • Always stay on top of your money by setting up standing orders or Direct Debits to pay off all or at least the minimum on any monthly repayments you have.

Find a current account

Finding a current account doesn’t have to be a chore although we appreciate it can be overwhelming – so much choice and they all seem to profess to be the best. Which is why, at comparethemarket.com we make it easy to search and compare current accounts, whether you just want a basic one, a standard account or a packaged account with lots of bells and whistles. And if you’re a student or soon to be graduate, then we can help you with those too. Whatever you need, we’re pretty confident that you’ll find it right here – try us. 

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