When people first open a bank account or get a credit card, they assume they would never have to do without these assets in the future. In so many ways, having a bank account is a necessity in the first world. Whether you are trying to pay bills, receive your paycheck, or spend money at a store, it is all a lot easier if you have a bank account and attached debit card.
But what about those who are unbanked? Perhaps they never had a credit score, or they had a financial disaster that resulted in them declaring bankruptcy. These individuals do not have the option of opening a regular checking account. It is in these situations that sites like LetMeBank.com are so useful. They allow you to discover alternate banking options.
What is Being Unbanked?
The term unbanked refers to someone who does not have a checking account at a financial institution. Whether it is a regular bank or a credit union, if you do not have a checking account it means you are unbanked.
There are many reasons why a person may not have a bank account. Perhaps you were raised in an environment where you did not learn about bank accounts. Maybe you arrived from another country and have not gotten around to setting one up. Or maybe you lost those privileges due to financial mistakes.
The latter is a very common reason, as one of the consequences of overdrafting on your bank account is that you are not able to open another one at a different financial institution. It is why resolving such issues in a timely manner is so vital. You have to make sure that you do not give the bank a reason to close your account and report you to credit agencies.
Second Chance Banking
If you have a bankruptcy that is relatively recent or a very low credit score, you will have a hard time opening a bank account. Even if you provide them with all your information, the bank may decline to give you a checking account.
In such an event, you will want to look at second chance banking options. These are banks that create accounts specifically for individuals who are in your circumstances. They understand that you have no credit or a very low score, and they are still willing to give you another chance.
You provide them with all your information, fill out the relevant paperwork, and make a deposit that is usually at least a few hundred dollars. Then you get the information about your account and you can use it as you would a standard bank account.
There are limits to these accounts and very few of the perks of having a checking account, such as no ATM fees, cash back, and rewards. But you can have your pay deposited into the account, pay your bills, and make purchases with the attached debit card.
Rebuilding Your Finances
Getting a second chance bank account is not the ultimate solution. It is better to think of it as the first step in reclaiming your finances. What you will do with that bank account is ensure that it is always in good standing. Try to maintain a balance over $100, so you are never in danger of having a $0 or negative balance.
Another step that you can take to improve your financial circumstances is to get a secured credit card. These are an excellent option for those who want to quickly improve their credit score.
A secured credit card is useful as the company reports to the credit agencies each month regarding your status. If you are paying off the entire balance each month, avoiding any late payments, and not accruing interest, then you are likely to see your credit score rise without any financial penalties.
Find the Ideal Banking Solution
There is no shame in admitting that you need to find a second chance bank account. Rather than avoiding the issue, it is best to find the solution that fits your needs. Using an online tool, you can see what second chance bank accounts are available to people in your area.
Then you can go about setting up the account and rebuilding your finances. Even if you have a very low credit score, you should know that most payment defaults are removed from your record after several years, so you can elevate your credit to a good or excellent level in less than a decade. It is hard work, but well worth the effort.
