Since the credit crunch hit, banks have made it increasingly difficult for consumers to obtain credit. Whether it is a loan, mortgage or credit card, it has never been tougher to be approved. This is also true of bank accounts, as criteria for being accepted for a current account have become stricter over recent years.
So, if you have a less-than-perfect credit history, getting current accounts can be tough. However, all is not lost as there are a range of bad credit bank accounts available on the high street. If you are looking for this sort of account, ask these three questions.
What facilities do bad credit bank accounts offer?
When shopping around for bad credit bank accounts, it is worth finding out what facilities and benefits the various accounts offer. You will typically find that the services offered on these current accounts are limited.
Basic current accounts will generally let you:
- Pay in and withdraw money
- Have your salary credited to the account
- Use an ATM Card to withdraw cash
You may find that you won’t receive a credit or debit card or cheque book and there is unlikely to be any overdraft facility. Some accounts won’t even let you set up direct debits or standing orders.
What charges and fees do bad credit bank accounts have?
Always check what fees and charges are applicable to your account. Most basic bad credit bank accounts should have little or no fees. However, if you want some additional facilities – such as a debit card – you may have to pay a monthly charge. Be sure this fee is worthwhile.
Do bad credit bank accounts help me repair my credit?
By using your bad credit bank accounts responsibly, you will help to repair your credit rating. Find out from the account provider whether they will automatically upgrade your account to a full current account in the future if you prove you can manage your account correctly.
