Understanding second chance checking accounts

Most banks today use the services of ChexSystems, in which your name and Social Security Number can bring up your histories of bounced cheques. Any irresponsible use of checks that has been exhibited by you in the past could result in a bank refusing to open a checking account for you. But that might not mean the end of the road for you, because there are a number of banks which offer checking accounts to people with bad credit, based on certain conditions. Such accounts are commonly referred to as Second Chance Checking Accounts.

How to Select the Bank 

You need to first make a list of banks in your locality and then go to their nearby branches or access their website to find out whether they offer Second Chance Checking Accounts. You could also ask for recommendations from friends, colleagues or business associates who have such accounts. Once you know which banks can open such accounts for you, you need to do a comparison of their product features. Ideally, the branch should be close to your home or office, should have the easiest procedure for opening and operating the account, and most importantly, should be covered by Federal Insurance, so that your money is secure.

What Documents Are Required 

The basic documents required are the same that would be needed for opening a traditional checking account. First, an identity proof of yourself and your firm. If there are other partners or directors in your company, then you could take their identity proofs too. Next, you would require an address proof, which would be most likely a recent utility bill in your name. A couple of photographs can also be taken along, in case they are required. The fourth thing to carry is your Social Security card. And finally, you should take along a check of another bank or cash, which will be required during account opening.

Things to Ask 

Since yours will not be a regular checking account, therefore a number of features which would be available in a traditional account might not be available for your second chance checking account, or it might be available in exchange for a certain fee. You should ask about the availability of all the features that you are likely to avail, like ATM use, overdraft, cheque usage, monthly account statements etc. Some banks might make these features free for you, if you agree to maintain a certain deposit in the account.

Once you have opened a Second Chance Checking Account, you should maintain a healthy balance in it and avoid check returns or overdrafts. Many banks give you the option of upgrading to a traditional checking account if you maintain the account in a proper way for the whole duration of the probation period.