Securing a business checking account despite having bad credit is often possible because most banks focus on other factors during the application process rather than solely your credit score. The FICO credit score ranges are:
- Exceptional: 800 and above
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: Below 580
Although your credit score might not be a critical factor for opening a business checking account, many banks will evaluate your ChexSystems report. A ChexSystems report provides a detailed history of your banking activities, including account openings and closures, unpaid balances, bounced checks, and instances of fraud or misuse.
To avoid potential issues during the account opening process, request a copy of your ChexSystems report in advance. Ensure all the details are accurate. If you find any discrepancies, file a dispute with ChexSystems to correct them. You’ll likely need to provide documentation for the dispute process.
Under the Fair Credit Reporting Act, you are entitled to receive one free copy of your ChexSystems report every 12 months. Keeping your report up to date can help you avoid any obstacles when applying for a business checking account. Additionally, some banks may offer “second chance” business accounts designed for individuals with challenging banking histories. These accounts may have higher fees or restrictions but can serve as a stepping stone for improving your banking relationship.
What is a Second chance business Checking account?
A second chance bank account is designed for individuals who have experienced banking issues in the past, such as overdrafts, unpaid fees, or account closures due to negative balances. This type of account offers an opportunity to rebuild banking relationships by providing basic services, often with higher fees and restrictions compared to standard accounts. It may include limitations on transactions, require a minimum balance, and lack features like overdraft protection.
One bank that offers second chance bank accounts is Chime. Chime provides an option called a Chime Spending Account, which is a simple checking account designed for customers who may have faced banking challenges in the past. This account does not charge overdraft fees, monthly fees, or require a minimum balance, making it an attractive option for individuals looking to rebuild their banking relationship. Additionally, Chime offers features such as early direct deposit and a linked savings account, allowing customers to better manage their finances.
If you need help or more info, book a consultation with us at www.qbtconsulting.com, and make sure to stay up to date with latest news on our blog.
