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Perhaps in your younger years you took your bank for granted. Your account went negative and the fees went unpaid. Maybe your account was closed involuntarily, or you had some fraudulent activity. If you are not in a position to dispute this information with your bank or with the consumer reporting agency that recorded the activity on your account, then you’ll need to decide what type of checking account you will apply for going forward.
Any type of second chance checking account you select likely won’t have the same functions and features as a standard checking account. And there will probably be higher fees associated with it.
Now that you are raising a family, you’re most likely finding it hard to outrun your past banking indiscretions. And the bad news is, you’ll have to wait 5 years for your ChexSystems report to be cleared.
Your Ideal Bank Will Ignore or Look Past Your ChexSystems Score. The Good News:
· You still have the opportunity to accomplish your financial goals.
· With your family’s future in mind, you can choose a bank that is right for your family.
· You can embark on gaining financial freedom from your history and focus on a successful monetary future.
Understand the Restrictions
Remember that second chance banking is primarily a safe place to keep your money. And the restrictions and fees that these accounts come with are made to ensure that you don’t spend money that isn’t in your account. Your new bank is keeping you from making the same mistakes that landed you here in the first place. And any bank that gives you a second chance account will have a timeline in which you can drop certain fees associated with the account assuming you maintain a spotless record for the allotted time frame.
It helps to view these restrictions as opportunities to clear your mistakes away, rather than rules to keep you from taking full advantage of a traditional checking account. After 6 months to a year, you may even have the option to switch to a traditional account with fewer restrictions.
So, keep in mind that some second chance checking accounts come with a catch to the “free checking and debit card” that they offer in their ads and on their website. You may only get free access to those services once you’ve had a year of perfect banking activity. It’s not a bad deal, especially when your family’s financial success relies on your record being cleared so that you can eventually access, unrestricted by your past, all of the services your bank offers. For more information about what are the best banks that don’t use ChexSystems visit here.
Define Future Success for Your Family in Your Own Terms.
What does success look like in your family? Will you need to buy a new home for your growing family? Will you buy a car as a graduation gift for your eldest child? Or maybe you’ll need to start a college fund when your children are still in preschool. Even if you don’t know exactly what the future holds, it’s important to be prepared for anything. And the only way to be prepared for all of the banking needs you might have is to have a good relationship with your bank in which you are free to access all of the services you require to make your financial goals a reality.
Services to look for:
1. Home loans and car loans are typical milestones reached by growing families.
Lending could be the biggest benefit you gain from your new banking relationship. It won’t happen overnight, especially if you have bad credit and fraud in your past. If you have past banking fees to pay off, you will especially want to clear your debts before applying for a loan. But in time (approximately 5 years, as previously mentioned) you can leave your bad ChexSystems score behind and start to utilize a wider range of features offered by your bank. When you’re not considered a risk to them, you will gain trust and find more opportunity than you once thought realistic for you and your family.
2. Interest-earning savings accounts can set you on the right path to meeting financial goals.
Savings accounts are a huge benefit for a family. Setting financial goals and seeing them come to fruition through an interest-earning savings account connected to your checking account will help you set and achieve objectives and set yourself up for future attainment.
3. Debit card and checking options will need to fit the entire family’s needs. Remember that the major restrictions that occur in second chance checking accounts include fees for too many cash withdrawals, dipping below minimum monthly balance, and fees associated with ATM use.
This is important to remember because if this checking account is used by your family, then conceivably you and your spouse could both be in possession of a debit card which pulls from the same account. So, remember that withdrawals are numbered and there will be fees for overusing this service.
4. Don’t accept services that could land you back in trouble. Consider the option in your checking account of overdraft protection. Ask yourself and whichever family members you plan to share the account with if the protection is going to become a temptation to overspend. Set yourselves up for success by knowing your habits.
If in the past you’ve made mistakes with your banking by allowing your account to go negative or go below your minimum balance requirement, then do not accept that service. You need to be prepared to reset habits and reject any opportunity to return to your old ways. Do not start your new banking relationship by letting unpaid non-sufficient funds fees, overdraft, or any other maintenance fees go unpaid or ignored completely.
Choosing a bank that doesn’t use ChexSystems is a big decision with a lot of options to consider. But that is even more true when you have your family’s welfare and future to consider. But your past does not have to define your financial future and it definitely does not have to keep your family from experiencing financial success!
About the Author
Kirsten is the owner and writer of IndebtedMom.com, where she shares her experience and tips for getting out of debt and improving your credit score.