Overcoming banking troubles while you’re in debt
Problems repaying debts – past or present – can be a real obstacle if you’re looking to open a bank account, not just if you’re looking to borrow money. Your credit history shows how you’ve handled your finances in the recent past, and if you’ve run into problems repaying the money you owe, you might discover you can’t find a bank account that’s open to you.
However, there are bank accounts out there designed to be available to just about anyone. They’re called basic bank accounts, but they’re often referred to as ‘bad credit bank accounts’, and they’re open to people with a bad credit history. They still provide the features that most people see as essential these days, such as the ability to pay money in, withdraw it at cash machines and make use of Direct Debits.
They don’t offer things like overdrafts and credit cards (things which someone with a bad credit rating might find it very hard to be approved for).
In other words, opening a bank account with no credit check is possible – when a basic bank account doesn’t require a credit check at all, it won’t matter what kind of financial history someone has behind them. They’ll just have to be able to prove their identity and show that they’re a resident of the UK aged 18 or over.
Looking ahead, the fact that you have a bad credit rating at the moment doesn’t mean it’ll stay like that forever. There are many things you can do to show potential lenders in the future that you’re taking steps to get in control of your money.
If you’re carrying unsecured debts today, making every payment on time can really help – it’ll show that you’re committed to repaying those debts and capable of doing so.
You could also register on the Electoral Roll. If you’re not on it, or you’re not listed at your current address, this could make it harder to borrow money.
And simply having a bank account can also make it easier to borrow, since it’s one thing that can show lenders you’re used to dealing with money.
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