Basic Accounts For Bad Credit – most major UK banks offer basic bank accounts, however, they will rarely advertise them because they don’t bring any profit. Still worth taking into consideration.
No matter your financial standing, whether CCJs, defaults or you’re new to the country, having access to a basic account is an invaluable way to get back on your feet and rebuild. But you may face restrictions due to immigration status.
Basic Accounts for Bad Credit – No credit check
As soon as your credit rating falls below 500, getting an account that can help manage your money is essential. There are various no-credit-check bank accounts that may suit your needs: these may be found locally at post offices and branches as well as online and via telephone; they allow you to track expenses more easily while helping increase on-time bill payments and help improve your score overall.
The nine largest banks in the UK must offer basic accounts. Although they may not actively promote them as much as standard current accounts, you can ask in branch if one is available to set up direct debits, standing orders and simple cash cards as well as receive wages and income payments through them. You can even set text or email alerts so you can cancel payments before their due dates arrive!
Some banks may refuse to open basic accounts for you if you’re an undischarged bankrupt or have a history of fraud; however, other options exist such as prepaid cards and Credit Unions which provide accounts tailored specifically to each community across the UK and may even accommodate individuals who are unemployed or those with bankruptcy histories.
Basic Accounts for Bad Credit – No minimum balance
People with poor credit often aren’t able to open traditional bank accounts due to failing the required credit check, or past issues making them high-risk customers for banks. But there are banks that specialise in offering basic or guaranteed bank accounts designed specifically for people with bad credit; often free. These accounts contain features designed specifically to assist those in this position.
These accounts are widely available across UK banks and building societies, and enable you to deposit or withdraw money, pay bills online banking services, use debit card banking services and more. They differ from standard accounts in that basic accounts do not come with overdraft facilities – to avoid paying a fee, it would be wiser to locate a bank/building society which offers one without.
An account with a basic bank could also be helpful for anyone who’s been rejected for credit due to poor credit. Just be mindful that your money may not be protected under the Financial Services Compensation Scheme which offers up to £85,000 of compensation should your bank fail.
Basic Accounts for Bad Credit – No overdraft fees
There are basic bank accounts without overdraft fees available to those discharged from bankruptcy or who fail a credit check, or those who can’t pass a credit check. You can discover them by visiting your local branch; most offer them for an annual fee; or opening one with a Credit Union which are often free. Some also have separate accounts available to undischarged bankrupts as well as all UK residents.
As most high street banks offer basic bank accounts, Barclays stands out as the superior choice. When opening an account with them, ID that verifies both your identity and address (for instance a passport, driving licence, utility bill or council tax notice) will be needed – some banks may request further documentation to prove identity or address; these should not discriminate based on race, age or nationality – our letter template allows you to file complaints if this occurs.
A fee-free basic bank account can be an ideal way to manage Direct Debits and standing orders, as well as keep an eye on income and spending habits. Reviewing your balance regularly (online, mobile or in person) will help keep an eye on finances while helping ensure no payments slip through the cracks. Make sure there is always enough money in your account to cover any outstanding debts otherwise additional charges from companies may apply if debts remain outstanding.
Basic Accounts for Bad Credit – No minimum deposit
All UK banks must offer basic bank accounts; however, many don’t advertise their availability or actively market them to prospective applicants. Instead, many encourage people to apply for one only to turn them away when their credit check fails – an unfortunate development since basic accounts tend to be cheaper and simpler to manage than their counterparts. Some mainstream banks go above and beyond in helping those with poor credit to open accounts successfully.
Some basic accounts for bad credit do not require a credit check, although you may still be asked to provide documentation such as utility bills, driving licences or passports as proof of your identity. You may also find free basic bank accounts at certain Credit Unions – these institutions even allow undischarged bankrupts to open an account although some may charge a small joining fee for basic accounts for bad credit.
Basic bank accounts provide access to banking services at a relatively affordable cost, offering features such as cash cards and the ability to set up direct debits and standing orders. Some accounts don’t provide overdraft facilities so be wary if going into negative balance is an option. There is also an emerging class of financial companies which guarantees acceptance without credit checks – however these tend to be more costly and aren’t covered by the FSCS.
If your application for a basic bank account has been denied, you can ask why. They must follow FCA guidelines and give a complete explanation. If you feel that discrimination based on race, nationality, place of birth gender or accent may have taken place then please reach out to Citizens Advice immediately for advice.
We hope you get your new basic accounts for bad credit as soon as possible.