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Not being able to open a bank account can be frustrating and inconvenient However, there are several common reasons why you may be denied a bank account Understanding these reasons can help you take steps to potentially resolve any issues and improve your chances of getting approved for an account in the future.
Reasons You May Be Denied a Bank Account
Here are some of the most common reasons people have trouble opening a bank account:
Poor Credit History
Banks often check your credit report when reviewing an application for a new account. If you have late payments, defaults, or other negative information on your credit history, it can make banks see you as a risky customer and lead to denials. Focus on improving your credit score before reapplying.
Previous Bank Account Problems
If you’ve had problems with past bank accounts, like too many overdrafts, unpaid fees, or accounts being closed because of bad management, this will probably show up in databases that banks check. Paying off any fees and debts can help your chances of getting approved next time.
Inability to Verify Identity
To make an account, you’ll need to give information about yourself, like your address, SSN, and date of birth. If the information you gave the bank is wrong or doesn’t match up, they may not be able to verify your identity. Double check all details if you get rejected.
Immigration Status
Banks are required to verify your U.S. residency status before opening an account. If you’re an immigrant without the proper documentation, like a Social Security number or ITIN it can prevent you from getting approved. Provide the specific documents the bank requests.
Minimum Balance Requirements
Some banks require a minimum opening deposit to open certain accounts. If you can’t meet this requirement, your application will likely be rejected. Consider accounts with lower or no minimums.
Age Requirements
Most banks have minimum age requirements, such as 13 years old for a savings account or 18 for a checking account. If you’re under the required age, you won’t be able to open an account. Consider adding a parent or guardian as a joint account holder if you’re underage.
What to Do If You’re Denied
If your application gets rejected, don’t panic. Here are some tips that can help:
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Get a copy of your checking account report and look it over to see if there are any mistakes you can dispute or negative details you can fix, like fees you haven’t paid.
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Try another bank – Each bank has its own application criteria. Try a few different banks and credit unions.
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Correct any application errors – If your identity couldn’t be verified, make sure all personal details provided are 100% accurate.
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Consider second chance accounts – These are designed for people with past banking problems. They can help you rebuild your banking reputation.
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Use prepaid cards or money orders. These aren’t the best long-term options, but they can help you out if you need to do basic banking.
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Save up for minimum balance requirements – If you couldn’t meet a minimum deposit amount, start saving and reapply when you’ve got enough.
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Ask to add a joint account holder – If you’re underage, adding a parent/guardian to co-manage the account may help with approval.
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Provide any other documentation requested – Ensure you submit all documents the bank asks for as they evaluate your application.
Don’t Get Discouraged
Getting denied for a bank account can be frustrating, but try not to get discouraged. With some persistence and focus on improving any potential issues with your banking history, you should eventually be able to open an account. Consider talking to a banker for personalized advice on your situation. And be sure to double check all information provided on any applications to avoid simple mistakes derailing your approval. With some diligence, you’ll be banking in no time.
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- Common reasons consumers are turned down for a bank account include a history of overdrafts, unpaid bank fees or suspected fraud.
- Applications can also be denied due to mistakes on ones checking account report.
- If youve been denied a bank account, ask the bank why this happened.
- Depending on why you were turned down, you may be able to move forward by clearing up your checking account report, trying a different bank or using alternative banking products.
Setting up a bank account can be the first step in getting your financial future on track. But just like with a credit card application, not everyone gets approved for a bank account.
If you’re struggling to open a bank account, you’re not alone. Many consumers are unable to open accounts because of problems with a past bank account, such as unpaid fees or a history of overdrawing the account. No matter what circumstances brought you to this point, there are still options, though they may take some persistence.
Try a different bank
After finding out why a bank rejected your application, try working with a different bank. Banks and credit unions across the country have different rules when it comes to application approval. Some banks, for example, may deny an application made by someone who recently filed bankruptcy. Others require you to pay any outstanding bank account fees before allowing you to open a new account.
Bankrate can help you shop around for the best checking account to suit your needs.
Denied For A Bank Account? – ChexSystems Explained
FAQ
Why am I getting denied for my bank account?
A bank may not let you open an account if they have seen that you have had accounts closed in the past because of low balances, overdrafts, or issues with verifying your identity. If you’re unable to open a bank account, here are some tips on what to do next.
Why are banks not letting me open an account?
Banks may turn down account applications for a number of reasons, most of the time because of bad past banking habits or problems verifying your identity.
Why would someone not be able to open a bank account?
Americans sometimes are denied bank accounts because they have been convicted of check fraud, identity theft, embezzlement, and other financial crimes. Sometimes they are denied for having bad credit or a low credit score.
What disqualifies you from getting a bank account?
There are several reasons a bank can deny you a checking account. People often close their checking account because they had problems with it in the past, like writing bad checks and having a bank charge off the account. Unable to provide sufficient identification at account opening.