A bank account is something that everyone should have, not only to keep your money secure, but to efficiently pay off bills and build up some savings, too. Yet when you’re turned down for opening a standard bank account, it’s understandable that you can feel confused and at a loss.
Whatever the reason for being turned down for a bank account, there are some alternative options available to help you on your way to improving your finances and to be approved for a bank account in the future.
H2: Possible reasons for being refused for a bank account
There are a number of reasons why you might be rejected for a standard bank account, and it’s beneficial to be aware of them before applying. Heading into an application without being aware of what you could be refused for, may negatively impact your credit score and could leave you in a worse situation than before.
Here are some of the biggest culprits which may mean you could be refused for a standard bank account:
1. A bad credit history or no credit history at all – when applying for a standard bank account with major banks, a credit check will be employed to see if you meet the financial requirements for opening an account with them.
2. Failing to provide ID – without the correct identification, you will not be able to open a bank account of any kind.
3. Current debts, including a pre-existing overdraft – some banks may not want to take any pre-existing debts on.
4. Salary – some banks will require a minimum salary or monthly income before providing you with a bank account.
5. If you are still going through the process of bankruptcy, you will not be able to register for a standard bank account until is has been fully cleared.
6. If you have been convicted of fraud, you may lower your chances of being approved for a high street bank account.
If you are concerned that you either meet one or more of these limitations, or if you are worried you won’t be accepted for a bank account, it’s well worth conducting a soft credit search before going forward with an application.
Alternatively, there are a number of other options available, which are particularly useful to those who are rejected for a standard bank account.
H3: Look into a basic bank account
Similar to a standard bank account, a basic bank account offers a personal place to store your money, and to transfer money to others, whether it’s for bills that you owe or for family and friends.
Although these types of accounts are not as heavily promoted as standard accounts, they are available, and are much easier to acquire, especially if you have any been rejected for other bank accounts.
If you’re thinking about applying for a basic bank account, there are a few things to bear in mind:
- Make sure you have enough money in your account to pay direct debits. You will be charged if you don’t have enough money to pay bills.
- Even with a basic bank account, you are required to provide ID when applying.
H3: Consider a prepaid card
A prepaid card allows you to put a certain amount of money onto it, to then use it just as you would a standard credit card. The only difference is that the money you spend is already loaded onto the card, so you don’t run the risk of falling into debt with money that you don’t have.
If you choose to use a prepaid card, it’s well worth having your monthly wages automatically loaded onto the card, so that you’re free to pay for bills and make purchases from it.
A particularly beneficial aspect of some prepaid cards on the market – such as the icount PrePaid MasterCard® – is that they can help you to build your credit rating. Whether yours has dropped from historical financial problems, or you haven’t been able to build it as of yet, it’s a fantastic alternative for those who have been refused a bank account.
Whatever you are applying for, you must always be able to provide proof of ID, even with these prepaid cards. You might also find that some companies won’t accept your application if you can’t prove your address.
Each of these options are a great way to start your journey towards financial recovery. Who knows, in time you might start to find that you are accepted for other applications, including standard bank accounts.