A second chance checking account lets you open a bank account even if you have been turned down before

A second chance checking account is a bank account designed for people who have had problems with banking in the past. Banks use a system called ChexSystems to track checking account history — things like overdrafts you did not pay back, accounts closed because of fraud, or repeated bounced checks. If you show up in that system with negative marks, regular banks often will not open an account for you. A second chance account bypasses that barrier.

These accounts work like any other checking account: you deposit money, write checks, use a debit card, and pay bills. The difference is in how the bank treats your history. Instead of automatically rejecting you, the bank either does not check ChexSystems at all, or it checks but does not disqualify you for past problems. Some second chance accounts come with higher fees or lower initial deposit requirements to offset the bank's perceived risk.

You do not need to be in a special situation to use one. You might open a second chance account because you had overdraft fees you could not pay, or because you closed an account years ago and want to start fresh, or because you are new to banking altogether and want a bank that will work with you.

Key Takeaways

  • Second chance checking accounts are offered by both traditional banks and credit unions, though credit unions often have fewer restrictions and lower fees.
  • You will need a government-issued ID and proof of address, just like any checking account, but the bank will not reject you based on your ChexSystems history.
  • Fees vary widely — some second chance accounts charge monthly maintenance fees of $10 to $15, while others charge nothing if you meet a minimum balance or direct deposit requirement.
  • Building a clean account history with a second chance account can help you move to a standard checking account within one to two years.

Where to find a second chance checking account

Credit unions are often the easiest place to start. Many credit unions do not use ChexSystems at all, or they use it only as one piece of information rather than a hard rule. You can find a credit union near you through CO-OP or Alliant, which are shared branching networks — you can use any branch in the network even if it is not your credit union. Credit unions also tend to have lower fees and more flexibility with overdrafts than banks do.

If you prefer a traditional bank, look for banks that specifically market second chance accounts. Some regional and online banks offer them. LendingClub Bank, Chime, and GoBank have historically offered accounts to people with ChexSystems records, though product details change. Call the bank directly and ask: "Do you offer checking accounts for people with ChexSystems records?" This is a straightforward question and banks will give you a straight answer.

Community banks and smaller regional banks are worth calling too, even if they do not advertise a second chance product. Many will open an account for you if you explain your situation and show you have a job or income now. The person on the phone can tell you whether it is worth coming in.

What documents you will need

Bring a government-issued photo ID — a driver's license, passport, or state ID card. You will also need proof of your current address. This can be a utility bill, lease, mortgage statement, or bank statement with your name and address on it. The document usually needs to be dated within the last 60 days, though this varies by bank.

Some banks will also ask for an ITIN (Individual Taxpayer Identification Number) or Social Security number. If you do not have a Social Security number, ask whether the bank accepts an ITIN instead. If you do not have either, some credit unions will still open an account for you — call ahead to ask.

Bring your initial deposit if you are opening the account in person. This can be as little as $25 at some banks, though $100 is more common. Some banks let you open online and deposit later.

How fees work on second chance accounts

Second chance accounts often cost more than standard checking accounts. A monthly maintenance fee of $10 to $15 is common, though some accounts charge nothing. The way to avoid the fee is usually to meet one of these conditions: keep a minimum balance (often $500 to $1,000), set up direct deposit, or maintain a certain number of debit card transactions per month.

Overdraft fees are another place costs add up. Some second chance accounts charge $25 to $35 per overdraft, the same as standard accounts. Others charge more, or they decline the transaction instead of allowing an overdraft. Ask the bank what happens if you overdraw — whether they will cover it and charge a fee, or whether they will straightforward decline the transaction.

ATM fees vary too. If the bank is part of a large network like Allpoint or MoneyPass, you may have free ATM access at thousands of locations. If not, out-of-network ATM fees can add up quickly. Ask which ATM networks the bank belongs to and whether there are branches or ATMs near your home or work.

How to move from a second chance account to a standard account

The goal of a second chance account is to rebuild your banking history so you can move to a standard account with lower fees and fewer restrictions. This usually takes one to two years of clean account activity — no overdrafts, no bounced checks, no accounts closed for cause.

Keep your account open and active during this time. Use your debit card regularly, set up direct deposit if you can, and never let your account go negative. If you do overdraw, pay it back when ready. The bank is watching to see whether you have changed your behavior.

After 12 to 24 months of clean history, contact your bank and ask whether you can move to a standard checking account. Many banks will do this automatically or will move you if you ask. If your current bank will not, you can open a standard account at another bank — your clean history with the second chance account will help you may have access to.

The difference between second chance accounts and prepaid cards

A prepaid card is not a checking account. You load money onto the card in advance, and you can only spend what you have loaded. There are no overdrafts, no checks, and no way to build banking history. Prepaid cards can be useful for budgeting, but they do not help you rebuild your relationship with banks.

A second chance checking account is a real bank account. You can write checks, set up automatic bill payments, and receive direct deposit. Most importantly, your account activity is reported to ChexSystems — good activity helps you rebuild your record. If you want to move toward traditional banking, a second chance account is the better choice.

What to do if you are turned down

If a bank turns you down, ask why. They are required to tell you if it is because of your ChexSystems record. Ask for a copy of your ChexSystems report — you can also request one yourself for free at chexsystems.com. Review it for errors. If something is wrong, you can dispute it.

If the information is correct but you believe it is outdated or unfair, explain your situation to the bank. Some banks will make exceptions if you can show that the problem was years ago, or that you have had a job and stable housing since then. A letter explaining what happened and what has changed can help.

If one bank turns you down, try a credit union or a different bank. Different institutions have different policies. What one bank will not do, another might.

Frequently Asked Questions

Will opening a second chance account hurt my credit score?

No. Checking accounts do not appear on your credit report and do not affect your credit score. Opening a second chance account will not hurt you. However, if you overdraft and the bank sends the debt to a collection agency, that can hurt your credit — so avoid overdrafts.

Can I use a second chance account to build credit?

A checking account alone does not build credit. Credit scores are based on borrowed money — credit cards, loans, and payment history on those accounts. A second chance checking account helps you rebuild your banking reputation, but to build credit you will need a credit product like a secured credit card.

How long does ChexSystems keep negative information?

ChexSystems keeps records for five years. After five years, negative items fall off your report. However, fraud and identity theft can stay longer. You can request your report at any time to see what is on it.

What if I do not have a Social Security number?

Some banks and credit unions will open an account with an ITIN instead. Call ahead and ask — do not assume you will be turned down. Community banks and credit unions are more likely to work with you than large national banks.

Can I have more than one checking account?

Yes. You can have multiple checking accounts at different banks. Some people keep a second chance account while opening a standard account elsewhere. Just make sure you can manage both accounts and keep track of balances so you do not overdraft.