Can a bank require a minimum credit score? (2024)

Can a bank require a minimum credit score?

Banks and credit unions want to know their new customers can manage their checking and savings accounts responsibly. However, they won't check your credit report or score, so you won't need an established credit history to qualify for a bank account.

Opening a checking and savings account requires that you have proof of a few things: your age (you must be 18 or share the account with a legal guardian), your identification (you must be a legal U.S. resident) and your current address. But you don't have to worry about where your credit score stands.

Can You Open a Bank Account With Bad Credit? You can open a bank account if you've made banking mistakes or have bad credit, but you may need to look for accounts that won't use ChexSystems if you're worried about your banking history.

As part of the application process for a new account, your banker runs your information through ChexSystems. If your name is listed in the system and it reports a low score, your banker will give you a copy of the free ChexSystems report and likely decline your application.

Accounts for Checking and Savings

The majority of standard checking and savings accounts do not prioritise credit scores. Banks may instead examine your ChexSystems report. Typically, a clear report (or one with minimal issues) suffices.

While Wells Fargo doesn't require a specific credit score to open an account, they will likely check to see if you have an existing ChexSystems report. ChexSystems is like the credit reporting agencies, but for bank accounts.

How long does negative information stay on ChexSystems and/or EWS consumer reports? Generally, negative information remains on ChexSystems and/or Early Warning Services (EWS) consumer reports for five years. Under the Fair Credit Reporting Act, certain negative information may be reported for up to seven years.

The primary reasons people can't open a bank account are negative items on a ChexSystems or Early Warning Services report, errors on the reports or bad credit. If your bank account application is denied, find out why.

Such negative activities that show up on your report and hurt your approval chances include bouncing checks, leaving an overdraft balance unpaid, abusing a debit card or applying for too many accounts in a short period of time, according to credit bureau Experian.

Do banks run a credit check to open a checking account?

One exciting corollary to the fact that banks don't pull your credit score when opening an account: Opening a bank account won't hurt your credit score, since there's no hard credit inquiry involved. That's comforting news to anyone opening a new bank account.

When the bank denies your application for a checking account, checking your ChexSystems report and fixing any problems or errors could help. If you still can't get a regular checking account, consider getting a second-chance bank account or prepaid debit card to help manage your spending.

FICO scores are generally known to be the most widely used by lenders. But the credit-scoring model used may vary by lender. While FICO Score 8 is the most common, mortgage lenders might use FICO Score 2, 4 or 5. Auto lenders often use one of the FICO Auto Scores.

Pay Off All Outstanding Debts – If the blacklisting results from unpaid debts or fees, resolve them immediately. This can be an important step in repairing your financial reputation. Consider Alternative Banking – Numerous institutions acknowledge that everyone deserves a second chance.

Bottom line. To qualify for the Wells Fargo Active Cash® Card, you typically need at least a FICO® score of at least 670. However, the issuer also looks at other factors, such as the amount of credit card accounts you have and the time frame from which you opened a new account.

While Chase doesn't require a specific credit score to open an account, they will likely check to see if you have an existing ChexSystems report. ChexSystems is like the credit reporting agencies, but for bank accounts.

Wells Fargo Clear Access Banking offers a clear path to eventually to a standard bank account. After 365 days, customers can convert into any Wells Fargo consumer checking account available. Although the account has a low monthly fee, there are several ways to avoid it.

While most banks and credit unions use ChexSystems or another consumer reporting agency, there are several that offer what's called second-chance banking. These financial institutions either don't check your ChexSystems report at all, or they're willing to look past some negative items.

Chex Systems, Inc. (ChexSystems) is a nationwide specialty consumer reporting agency under the Fair Credit Reporting Act (FCRA). ChexSystems' clients regularly contribute information on closed checking and savings accounts.

Request your report

You're eligible for a free copy of your report once every 12 months. Request your record in one of these ways: Call ChexSystems at 800-428-9623. (This is an automated voice messaging system.)

How do I get rid of ChexSystems?

If you want to have your information excluded permanently, you may print, complete, sign and return a ChexSystems Permanent Opt Out Election form. Please complete the entire form. Failure to provide complete and accurate information may prevent the processing of your request.

AML red flags are warning signs, such as unusually large transactions, which indicate signs of money laundering activity. If a company detects one or more red flags in a customer's activity, it should pay closer attention. In many cases, companies have to submit suspicious activity reports to authorities.