Second chance banking

Many banks and credit unions check a checking account reporting company before they open an account for you. ChexSystems and Early Warning Services are two of them. Banks and credit unions send these companies information about past accounts, and the companies turn it into a report of your checking account history. It shows things like overdrafts that were never paid back and accounts a bank closed with money owed.

Most negative records can stay on your report for up to seven years, even if you pay what you owed later. That can feel unfair when the overdraft happened during a bad winter years ago. It doesn't lock you out, though. Banks set their own rules, and some accounts are built for people starting over.

• Get the reports. By law, you can get a free copy of your checking account report every 12 months, and another free copy if a bank sends you an adverse action notice turning you down. Get your ChexSystems report online, by mail or by phone at 800-428-9623. Get your Early Warning Services report, which it calls a file disclosure, at earlywarning.com or by phone at 800-745-1560.
• Check every line. If something is wrong, dispute it in writing with the reporting company and with the bank that reported it. Reporting companies must investigate disputes of inaccurate information and correct what's wrong.
• Settle what you really owe. Call the bank, ask what it takes to pay it off, pay it, and get a letter saying it's paid. Paying may not remove the record, but some banks won't open a new account until old charges are paid.

• Bank On certified accounts meet the Bank On National Account Standards (2025–2026): they cost $5 or less a month (or $10 or less if there are at least two ways to get the fee waived), take $25 or less to open, and charge no overdraft or NSF fees. The standards also strongly recommend, without requiring it, that these accounts turn down new customers only for past fraud. The Bank On finder lists them.
• Second chance checking is a reduced-service, reduced-fee account meant for people with problems in their banking history. At banks and credit unions it's often an account that won't let you overdraw. Before you open one, some ask you to pay fees you owe from an old account or to take a money management class. Some limit features such as paper checks. Some let you move to a regular account after a stretch of good use, so ask whether yours does and what it takes.

Either one gets your pay into an insured account and builds a record of your income. The FDIC says second chance accounts can help you rebuild your banking history.

Example (made-up fee): Marcus cashes his $900 weekly check at a check casher that charges 2%. That's $18 a check, or $540 over a 30-week season. A Bank On account at $5 a month costs $60 a year, so switching keeps about $480 in his pocket.

Prepaid cards can carry a monthly fee, reload fees and ATM fees. Read the fee chart and add up a year the same way. Cash kept at home has costs too: it can be lost or stolen, and it leaves no record of your income when you need one for an apartment or a loan.

• ChexSystems: request your free report (or call 800-428-9623)
• Early Warning Services: request your file disclosure (or call 800-745-1560)
• FDIC: Get banked
• Bank On account finder
• CFPB: What to do if you're denied a checking account