It's hard to get by without a bank account, but if you've got a bad credit rating you may find it tough to get one.
You may have bad credit due to missing a repayment on your credit card, mortgage or loan, or because you have been in and out of unemployment or moved address multiple times.
But whatever your situation, we look at the different options available for those with bad credit and explain what bad credit bank accounts are and how you can get one.
If you need a bad credit bank account, you could try one of the basic bank accounts offered by the majority of the big high street banks.
A basic account will allow you to pay in and withdraw money, but other facilities and services may be quite limited – for example you probably won't be able to get a debit card or cheque book and you might not be able to set up standing orders.
If you have a very bad credit history, have been declared bankrupt or have a record of fraud, you may find you won't be accepted for even a basic bank account, and applying and being rejected could leave a negative mark on your credit report.
The most basic accounts are designed for people with bad credit and may not even require a credit check, but they do require a monthly fee and often charge you for withdrawing cash.
There are a range of bad credit bank accounts available, so don't give and shop around. Make sure you do your research and don't settle for the first account you can get, many basic bank accounts offer extra perks.
Most bad credit bank account companies promise to get you a bad credit bank account with all the usual facilities like a debit card, cheque book and overdraft in return for a fee, so before you go down this route you should rule out the possibility of getting a basic bank account.
Most bad credit bank accounts will give you a prepaid card or debit card for withdrawals, but these will often come with a fee, so read the fine print
Bank accounts for bad credit are usually the most basic so you should not be expecting to get an overdraft if you have bad credit. Many of them also don't perform any credit checks, so you're almost guaranteed acceptance.
It is safer to compare bad credit bank accounts using an FCA regulated comparison website as you will have the reassurance that the banks you compare would have been appropriately accredited.
Alternatives to basic accounts from the bad credit banking market are providers like CardOneBanking, who charge a monthly fee but require no credit check and guarantee to accept you, no matter what your credit history.
Much like a normal bank account, you can arrange to have your wages or other income paid directly into your account, pay in cash or cheques at the Post Office or Natwest branches and set up standing orders to pay your bills.
You can't have a chequebook or an overdraft and you don't earn any interest, but there are no fees for missed payments, you get a personal account manager and access to online, telephone & SMS mobile phone banking.
Another big advantage of these types of accounts over basic bank accounts is that you get a Prepaid MasterCard credit card – which you transfer money onto and use just like a debit card for all your daily spending in shops, over the phone and online and to get money out at cash machines.
Other popular bad credit bank accounts include Think Money and Clear Cash, with the latter offering a product to help improve your credit in conjunction with your banking.
If you are not sure what your credit score is like or what kind of credit or banking products you would be accepted or rejected for, then it may be worth your time signing up for a credit report and score from a credit reference agency.
See below for some tips that could help improve your credit score, but remember that doing so does not guarantee that your credit rating will be good enough to secure a bank account with all the usual features.
A bad credit bank account may be the best place for you to look first as most of these do not perform any credit checks, and therefore almost guarantee that you will be accepted. Nonetheless, a credit report may help you reassess your long term credit options if you think you have bad credit.
You can do a few things to help improve your credit score, or rather prevent it from getting worse.
Get yourself on the electoral register at your current address
Set up a Direct Debit on your credit cards so that you don't miss any repayments
Do not keep applying for credit if you've already been rejected – try to keep applications six months apart at the very least
Close any unused bank accounts, especially if they still have an overdraft on them
Ensure that anyone you're financially tied to (such as your husband or wife) does the same