How to recover from credit problems

Opening a new bank account when you have low credit ratings is not easy, but there are a few basic accounts that can get you started

10:18 21 September 2013

Banks know everything about your debts – to whom and how much you owe. This is the reason why opening a new bank account can be very difficult if your credit score is low. One of the best solutions to do that is opening a basic bank account.

Here are some of the main advantages and disadvantages of the basic bank account:

Advantages:

• Although they may not advertise this product very much, almost all banks have a basic bank account product. You may have to ask them specifically for this product;

 

• the most important thing about this basic bank account is that banks will not check for your past credit experiences before granting it to you;

 

• the basic bank account is the most basic account you can get on the market – this means that your actions will be limited to an extent, but you will still be able to receive your payments on it;

 

• If you prove that you have a fixed and steady income each month for, let's say, about six months in a row, banks may offer you another of their products or upgrade the current bank account that you have with them – so this could be the way for you to get back on track.

Disadvantages:

• the basic bank account is very limited, you won't be able to apply for any loans, debit card, overdrafts or check book with it;

It is important for you to remember that even if you had problems with your past bank accounts; the basic bank account is probably the best way for you to recover, provided you can prove to the bank that you are a trustworthy client with secure finances. It may take some time for you to do that, but it's a good way to go for a new beginning and learn from your past mistakes.