Turned down for a free checking account?

Just a guess… but a lot of checking accounts come with overdraft protection, which is essentially a line of credit.

Even without overdraft protection, a poor credit rating is probably considered an indicator as to whether you’re likely to bounce checks. Bounced checks and the associated hassle are costs for the bank as well.

Yes, true.. but as I understand it, banks have had their own system to check whether or not you’ve been “bad” at another bank, on a checking account. Called the “checks” system, or something like that. But it was totally separate from your credit report, which made sense. Until now?

Credit rating and your credit reports are becoming more and more important for all sorts of things ranging from how much you pay for car insurance to whether you can get a job.

To pay off the debts, can you take some of this large sum of money (assuming it is in cash) and pay off your debts with money orders? That’s what folks have to do locally who can’t get checking accounts.

Another possibility is to get a “secured” credit card and pay off the debts with that.

ChexSystems, or eFunds, is a database that many banks use to determine a potential customer’s previous use of bank deposit products. If that’s what they used, they are basing their decision on your previous history with other banks in terms of checking or savings accounts, not your credit record. I’m not saying the credit union didn’t check your credit – they may have done so. Reference what Darwin said above as to why.

I would ask to speak with the credit union manager and ask if they would let you open a savings account with no ATM access. This way you could buy money orders or cashier’s checks to pay your bills. It’s not the cheapest solution but it would get your bills paid.

Oh, and bad news.

Paying off the bad debts won’t help your credit score much. :-\

But that’s just from the automated approval standpoint. Once those debts are paid, you could likely make a stronger case in person by talking to a manager directly.

It is frustrating.

This would all make sense to me if I had been applying for credit. I want to give them money.

I guess if being a “risk” will eventual mean you can’t get a job, drive a car, or get a checking account.. perhaps crime or suicide are better options than trying to improve yourself?

btw. thanks for your answers, you all get lurve (or whatever that is).

this concept just makes my brain melt.. getting turned down for checking when i want
to give them thousands of dollers based on a couple of minor, and dare i say typical, flaws on my credit report – non of which involve checking accounts.

:(

@quasi – seriously, try to talk to a manager to see if they can help you. Many banks (and I would guess c.u.‘s as well) allow the branch manager to override decisions made by automated systems or their own employees.

@quasi, your credit score also has direct bearing on your insurance rates (home and auto). Apparently, there’s some correlation between your credit rating and how good a driver you are.

Actuarial tables are the unknown power of the universe.

@quasi , do you have any unresolved checking accounts with negative balances? you will not be able to open a new checking account hardly anywhere if you do… but as others have said, if you don’t go in and speak with someone. (it may be as simple as writing a letter explaining your situation)

Try again. As long as you are under the FDIC limit, most any bank should be OK. FInd one that has terms for free checking you can live with.

I recently opened an account that was free if I 1) had direct deposit and 2) used their online bill pay twice within 30 days. Those conditions worked for me.

credit controls your life. and its not just your credit rating its your history as well.

@christine215 right, i don’t have any previous checking account issues, which is what irked me the most.

i’m heading to a different bank today, check in hand, to see if i get rejected.

im comfortable with any free checking requirments.. i’m employed, can do direct deposit, prefer to pay my bills online anyway etc. etc.

i do agree with what many of you said, that i may have a different response had i talked to an actual person at the credit union. i just went for the convenient online application and got a rejection by mail.

i wish someone would have explained the ‘credit controls your life’ thing to me 10 years ago when i was 18 and irresponsible.. could have saved me some troubles.

Ah-ha! Quasi, I missed tht part, my apologies. Yes, do go talk to a person. Online is convenient, but a personal relationship to start out should help you. Then you can bank online to your heart’s content. I hope this works out for you.

@quasi its only been in the last 5 years that credit controls everything. It was not like this ten years ago. Now your cedit affects whether you can get a job, a loan of course, it affects insurance rates. I think I heard recently something else it was going to start affecting but It slips my mind. Basically if your credit is bad your are irresponsible and don’t pay your bills ontime and aren’t worth the time or effort. thats how it seems to be judged now.

Well folks.. Went to 2 other banks today. Talked to real live people. Both banks pulled credit. Both banks rejected me for a free checking account. When I explained that I had pulled out all of my retirement savings so that I could pay off debt, and that my new job at the University needs to have somewhere to deposit my salary and funding, they told me there is nothing that they can do. One bank was nice enough to deliberate on it for 25 minutes before telling me that they can’t help me.

-second class citizen

How about a pay checking account, at least for a while? Just because there are free checking accounts doesn’t mean you have to have one. In fact, most checking accounts used to be pay accounts. Not only did you have to buy your checks, you also had to pay a bit for processing each one, at least over a certain number of checks.

If the credit union is affiliated with the University and as you say you are now an employee of the University, they may have more leeway. Technically you aren’t just a depositor at a credit union, but actually a member. At this point, since you said you applied online originally, I would go into the credit union and get an appointment with someone who can actually make some decisions.

Our credit union recently imposed a new policy, that charges to members’ credit cards from Britain, Canada and Austria would not be accepted because there is “such a high rate of fraud in those countries.” Unfortunately for me, I sell books online through a company located in Canada as well as through a company located in Austria. The regular clerk could do nothing for me. However, I worked up to a manager who could order that restriction be lifted on my account only, as long as I signed a paper that the bank wasn’t liable for fraudulent charges from those three countries. I signed, they lifted, and things have been going fine.

Talk to the credit union people. See if there is anything they can or will do, even if it isn’t the free checking account but only a savings account. The University can still deposit your check there and you can still get your money.

Thanks @Darwin I do think I should go in and talk with the credit union people. I’m willing to do anything at this point.

Good luck!

@quasi, I’m a credit union member and one of the things that I like about it (vs. having my money in a bank) is that the credit union is more about member services… well at least the one I belong to anyway. I think if you speak with someone there, you’re better off.

And as @Darwin said, if the credit union shoots you down for a FREE checking account, go with them for one that has a service fee. At least until your credit gets better then go back and re-negotiate.

36 Risk Factors Creditors Use To Deny You Credit.

Well…. for those still reading this one.. I went to the credit union today and spoke with a couple people. They didn’t open a checking account but they were willing to do a savings account. Then, they will re-evaluate things in 6 months to see if I can get a checking account. Its a big compromise, but one I’m willing to take at this point. And I will note that they are the only ones I’ve talked to in person willing to budge at all. So now maybe, just maybe, I can begin to repair my credit.

Sounds like a plan! Good luck with it all.

@quasi – I’m glad that you at least got somewhere with a live person at the credit union! The decision that person made was the one that I, as a former banker, probably would have made too. And I’m glad that they’re going to re-evaluate in six months. It gives you time to show them that you’re a responsible customer and time for you to check out their service.