Self Help

Creditors look for bank accounts as a sign of stability. Quite frankly, they also look for bank accounts as a source of how you will pay your bills. If you fill out a credit application and cannot provide a checking account number, you probably won’t be given credit.

A savings or money market account, too, will improve your standing with creditors. Even if you never deposit additional money into the account, creditors assume that people who have savings or money market accounts use them. Having an account reassures creditors of two things: You are making an effort to build up savings, and, if you don’t pay your bill and the creditor must sue you to collect, it has a source to collect its judgment.

Just because you’ve had poor credit history, you shouldn’t be denied a bank account. Shop around and compare fees, such as check writing fees, ATM fees, monthly service charges, the minimum balance to waive the monthly charge, interest rates on savings, and the like.

You might be denied an account, however, if you have a bad check writing history. Check verification companies keep track of banks’ experiences with their customers, much as credit bureaus do for creditors. Most banks will check your check writing history with a check verification company before they will open an account for you. If you are denied a bank account because of information provided by a check verification company, call the company to discuss the problem and try to provide information that resolves it. If you can’t resolve the problem informally, you can dispute incomplete or inaccurate information in the company’s files just as you can with a credit bureau. Some popular check verification companies include: ChexSystems, Global Payments (formerly CheckRite), International Check Services, SCAN, and Telecheck.

If you open a checking account, be very careful not to bounce checks that you have written. A new federal law called “Check 21″ makes it harder to avoid bouncing checks. This law allows banks to process electronic images of checks instead of the paper originals. One result is that checks clear much faster than most of us are used to. Consumer representatives urge consumers not to write a check unless the funds are already in the account to cover it.

If you bounce a check to a creditor, it most likely will report a late or missed payment to a credit bureau, jeopardizing your hard work repairing your credit. A history of bounced checks also may make it harder to open bank accounts in the future.