My Business Credit Journey to 1,000,000

Having bad credit isn’t just a problem when people are looking to borrow money. It
can also get in the way when they’re looking for a bank account: if someone’s credit
rating isn’t what it could (or should) be, they may find that opening a standard bank
account just isn’t an option.

Which doesn’t mean they won’t be able to open a bank account. ‘Bad credit bank
accounts’ – also known as ‘basic bank accounts’ – are there to help people in that kind
of situation. They’re available to people who’ve had problems with their credit rating
and as a result can’t open the kind of bank account that comes with features like
overdrafts and cheque books.

They might be ‘basic’, but bad credit bank accounts still let people do the essentials,
like pay money in, arrange Direct Debits and withdraw money. A lot of them come
with a debit card as well, which can be extremely useful.

What if I’ve been made bankrupt?

If you’ve been made bankrupt recently and you’ve not yet been ‘discharged’ from
bankruptcy, you might find that even a lot of basic bank accounts are out of reach. If
this is the case, you’ll need to find one that’s open to undischarged bankrupts.

What if I want an overdraft?

If you can’t open an account with an overdraft, there’s probably not much you can do
about this – for the moment. Opening a basic bank account can really help you stay
on top of your finances and make sure your bills get paid on time, which can help
you improve your credit rating over time, so you can apply for an account with an
overdraft later on.

Having said that, do you really need an overdraft? If you’ve run into troubles with
your money in the past, having access to an overdraft might not be the best idea
anyway, if you’re trying to improve your money management skills. Many people find
that living without an overdraft makes it easier for them to stick to a strict budget -
and harder to get into debt.