Second chance checking accounts are offered by specific banks and credit unions, not all of them

A second chance checking account is a bank account designed for people who have been denied a regular checking account, usually because of a negative banking history recorded in ChexSystems or Early Warning Services. These are the two main systems banks use to track closed accounts, overdrafts, and fraud.

Not every bank offers them. The banks and credit unions that do are typically smaller regional institutions, online banks, or large national banks with specific second chance programs. You will not find these accounts at every branch of every major bank—you have to know which institutions have them and explore directly.

The account itself works like a regular checking account once you open it: you get a debit card, online banking, and the ability to write checks. The difference is in the approval process. A second chance account either does not check ChexSystems at all, or it checks and approves you anyway if your history meets their specific criteria.

Key Takeaways

  • Chime, LendingClub, Varo, and Vimeo are online banks known for approving people with ChexSystems records, though approval is not may provide for every applicant.
  • Credit unions, especially those in your area or those you have a family connection to, often have more flexible approval standards than national banks.
  • Some large banks like Chase, Bank of America, and Wells Fargo offer second chance programs, but you must ask for them by name—they are not advertised on the main website.
  • You will need a government ID, proof of address, and your Social Security number to open any account, regardless of your banking history.
  • Fees and minimum balances vary widely, so compare the account terms before you commit, because a second chance account with high monthly fees can cost you more than a traditional account.

Online banks that do not use ChexSystems or approve despite it

Online banks have lower overhead than brick-and-mortar branches, which means some can afford to take on customers with banking problems. Chime is the largest and most widely known. Chime does not use ChexSystems at all for approval, though it does run other background checks. You can open an account online in minutes if you have a valid ID and Social Security number.

LendingClub, Varo, and Vimeo are other online banks that either skip ChexSystems or approve applicants despite negative records. Each has different fee structures and features. Varo, for example, offers no monthly maintenance fee and no overdraft fees. LendingClub charges a monthly fee but waives it if you maintain a minimum balance or set up direct deposit.

The catch with online banks is that you cannot deposit cash in person. You deposit through direct deposit, transfers from another account, or mobile check deposit. If you need to deposit cash regularly, an online bank may not work for you.

Credit unions in your area or through family membership

Credit unions are member-owned cooperatives, not for-profit institutions. Many have more lenient approval standards than banks because they focus on serving their members rather than maximizing profit. Some credit unions do not use ChexSystems at all, or they use it but override a negative record if you can explain what happened.

Start by searching for credit unions in your city or county. The CO-OP Network and Allpoint are two large credit union networks that let you find branches near you. Call and ask directly: "Do you offer second chance checking accounts, or do you approve accounts for people with ChexSystems records?" Do not assume the answer is no—many credit unions do not advertise this, but they will tell you if you ask.

If you have a family member who belongs to a credit union, you may be able to join through them. Some credit unions allow anyone in a household to join if one person is already a member. This can bypass the ChexSystems check entirely, because you are joining as a family member rather than explore as a new customer.

Second chance programs at large national banks

Chase offers a program called ChaseSecure, though it is not advertised on the main website. Bank of America has a program called BankAmericard, which is technically a prepaid card but can function like a checking account. Wells Fargo has a program called Opportunity Checking. These programs exist, but you have to ask for them by name at a branch or call the customer service number and specifically request the second chance program.

The reason they are not advertised is that banks do not want to draw attention to accounts for people with problem histories. But the programs exist because regulators encourage banks to offer them. If you call or visit a branch and ask for the second chance program by name, the bank will know what you are talking about.

Approval at these banks still depends on your ChexSystems record. They will not approve you if your record shows fraud or if you owe money to the bank. But if your issue was overdrafts or a closed account due to low balance, you have a reasonable chance.

What you need to bring and what will disqualify you

Every bank or credit union will ask for a government-issued ID (driver's license, passport, or state ID), proof of your current address (utility bill, lease, or bank statement), and your Social Security number. Have these documents ready before you explore, whether you are explore online or in person.

What will disqualify you depends on the institution, but common reasons are: an open fraud case against you, an outstanding debt to the bank or credit union, or a very recent closure (within the last 12 months) due to fraud. Overdrafts alone, even multiple ones, will not disqualify you from a second chance account. Neither will a closed account due to low balance or inactivity.

If you were denied before, ask the bank or credit union why. ChexSystems records are not always accurate, and you have the right to dispute them. If the reason for denial was a mistake in your ChexSystems file, you can file a dispute with ChexSystems directly, and that may open doors at other banks.

Fees and features to compare before you open

Second chance accounts often come with higher fees than standard checking accounts. Monthly maintenance fees range from zero to $15 per month. Overdraft fees, if the account allows overdrafts at all, can be $25 to $35 per overdraft. Some accounts charge a fee just to speak to customer service by phone.

Before you open an account, compare the fee schedule across at least three options. A second chance account with a $12 monthly fee costs you $144 per year—more than some traditional checking accounts at the same bank. Look for accounts with no monthly fee, no overdraft fees, or both. Online banks tend to have lower fees than brick-and-mortar banks.

Also check whether the account includes a debit card, whether you can write checks, and whether you can set up bill pay online. Some second chance accounts are stripped-down versions with limited features. If you need to pay bills by check or withdraw cash at ATMs, make sure the account supports those things.

What to do if you are denied again

If you are denied by multiple banks or credit unions, your ChexSystems record may be the barrier. You can request a free copy of your ChexSystems report by visiting the ChexSystems website or calling 1-800-428-9623. Review it for errors. If something is wrong—a closed account listed as fraud when it was not, or a duplicate entry—you can file a dispute.

ChexSystems must investigate your dispute within 30 days. If they find the information is inaccurate, they will correct it and send you an updated report. You can then take that corrected report to a bank and reapply. This process takes time, but it can remove the barrier that was blocking you.

Another option is to use a prepaid card or secured credit card as a stepping stone. These do not require a ChexSystems check and do not report to ChexSystems. After six to twelve months of responsible use, you may be able to open a traditional checking account at a bank that does check ChexSystems, because your recent history will show you can manage money.

Frequently Asked Questions

Will opening a second chance account hurt my credit score?

No. Checking accounts do not appear on your credit report, and opening one does not affect your credit score. Banks may do a soft inquiry into your credit as part of the process, but soft inquiries do not lower your score. Only hard inquiries (like explore for a loan) can affect your score.

Can I switch to a regular checking account later?

Yes. After you have had a second chance account for six to twelve months with no overdrafts or problems, you can ask the bank to convert it to a regular checking account, or you can open a regular account at a different bank. Your improved history will make you approvable at institutions that rejected you before.

What if my ChexSystems record is accurate but old?

ChexSystems records stay on file for five years. After five years, the record falls off automatically. If your record is accurate but from several years ago, you have a better chance at approval from banks that look at the date of the problem. Online banks and credit unions are more likely to approve you if the issue was more than two years ago.

Do I need a minimum deposit to open a second chance account?

Most second chance accounts require a minimum opening deposit of $25 to $100, though some online banks have no minimum. Check the specific account terms before you explore. The minimum deposit is not a fee—it is money that goes into your account and you can spend or withdraw it when ready.

Can I get overdraft protection on a second chance account?

Some second chance accounts offer overdraft protection, but many do not. If they do, it usually comes with a fee. Some accounts link to a savings account or allow you to opt into overdraft coverage for a flat fee per transaction. Ask the bank what overdraft options are available before you open the account.