Current Accounts For Bad Credit UK Customers
Current accounts for bad credit rated UK individuals are available from financial institutions that specialise in offering such accounts as well as many of the major high street banks and building societies. You can often apply online for an account that usually comes with a debit card to buy items and withdraw cash at many ATMs. You can have monies paid in such as your salary and set up direct debits and/or standing orders to pay regular bills. Those companies specialising in providing them do not usually undertake a credit check whereas the banks tend to do so. Therefore, a current account can usually be opened for someone even if they have poor credit including being bankrupt.
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- Credit Check Undertaken?
- Application Fee
- Monthly Fee
- UK ATM Fees
- Debit Card
- Direct Debits
- Standing Orders
- Pay in Salary/Benefits etc
- Online Banking
- Other Benefits
- £12.50 (£17.50 for joint account)
- £1.50 ATM UK
- Prepaid Debit Mastercard
- One-to-one Account Manager
- £9.95 (Deluxe Account)
- Free ATM withdrawals in UK (Deluxe Account)
- Prepaid Mastercard
- Cashback rewards and Free Purchase Protection
- £5.95 (Classic Account)
- Free ATM withdrawals in UK up to £900pm then 2% of amount withdrawn (Classic Account)
- Contactless Mastercard
- Marketplace – access to range of products and services
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(The above fees are correct as at 22nd January 2021. Other fees may apply. Please check the individual companies websites prior to applying.)
What does a poor credit current account provide?
Current accounts for bad credit rated people usually offer many of the facilities that a standard bank current account provides such as: –
- Have your salary, pension and/or benefits paid directly into your account. Many offer the facility to pay in cash and/or cheques through a variety of outlets.
- Operate your account either online or over the phone which enables you to access things like your balance and view your transactions 24/7.
- Use a debit card to buy products and services online, over the phone or at high street shops and to withdraw cash at many ATMs both here in the UK and overseas.
- Set up direct debits and/or standing orders to pay your regular household bills such as your mortgage repayments, council tax, rent, utility bills and home insurance.
- Some are operated on a “managed” basis so you can speak to a member of staff who will go through your personal budget to establish how much you need to set aside to cover your household bills. Any remaining monies are then often transferred on your behalf onto a Mastercard or Visa prepaid debit card for you to spend.
We have not come across a bank, building society or specialist provider of such current accounts that may be suitable for those with bad credit that will issue you with a cheque book and very few will make available an overdraft facility.
Who can obtain one?
The application criteria for current accounts for bad credit scored individuals may vary between the different companies offering these types of account but they tend to be suitable for those UK residents over the age of 18 who have an adverse credit history although there is nothing to stop someone applying if they have a good credit rating. For instance, you could apply if you are employed and in receipt of a weekly wage or monthly salary, unemployed and in receipt of benefits, retired and getting a pension, if you are self-employed and even if you are bankrupt.
How do you apply?
Many providers allow you to apply online for a bad credit current account by completing an easy to fill in form.
An instant decision is often provided for those applying for current accounts online with bad credit especially as no credit check is undertaken by many financial institutions.
Your identity and address can often be confirmed by electronic means but, if not, you would be asked to provide documentary evidence such as a current passport and recent utility bill.
Are there any application and/or monthly administration fees for basic bank accounts?
Specialist providers such as the ones contained in the above comparison table may charge an application fee and/or a monthly administration fee for their current accounts for bad credit rated people. They may charge other fees such as to use an ATM to withdraw cash in the UK and overseas. You should check their websites for full details of their fee structures before applying to open an account with one of them.
In the main, the major banks and building societies do not charge either an application fee or a monthly administration fee for their basic bank accounts and they do not normally charge you to use your debit card at an ATM in the UK to take out cash.
If you would like to find out a little bit more about about some of the financial companies offering these specialist current accounts then why not read the likes of our informative Cashplus Personal Current Account review, our comprehensive review of the CardOneMoney Personal Current Account and our detailed Monese Personal Money Account review.
All of them should enable you to undertake your day to day banking such as paying regular bills and using a debit card to buy things.
Some Other Frequently Asked Questions
How many people have basic bank accounts in the UK?
It is estimated that in the region of 8 million basic bank current accounts are open here in the UK so, if you are considering opening one, as you can see, you are certainly not alone. There are an awful lot of people who have got into financial difficulty for a number of reasons such as due to loosing their job or their partner leaving them.
Is a credit reference search carried out?
High street banks and building societies tend to carry out a credit reference search but the financial institutions that we provide access to via this website usually open a bank account with no credit checks. This makes the process so much more straightforward and is one of the reasons why they are often referred to as guaranteed bank accounts.
Are such bank accounts available to bankrupts?
Yes, it may be possible to open either a basic bank account or a guaranteed bank account for a discharged bankrupt or undischarged bankrupt. The application process is just the same as for someone that has not had to go through UK bankruptcy.
What sort of identification is required?
If the financial institution is not able to deal with this electronically there are often a number of options to prove identity and confirm you live at the address you say you do such as: –
Identification – Full current Passport, UK full paper driving license, UK photocard driving license, UK provisional driving license, EU/EEA driving license, centrally issued EEA or EU national identity card, UK Armed Forces ID card, Benefit entitlement letter issued in the last 12 months, HMRC tax notification issued within the last year.
Address Verification – bank statement issued within the last 3 months, utility bill issued in the last 3 months, Full UK photocard or paper driving license, UK provisional photocard driving license, UK credit card statement issued within the last 3 months, UK, EU, EEA mortgage statement, Benefit entitlement statement issued in the last year, tenancy agreement issued in the last year, HMRC tax notification issued in the last 12 months.
How long does opening a bank account with bad credit take?
If you complete an application form to open a bank current account online with bad credit it is sometimes possible to be provided with an instant decision as to whether your application has been accepted with a debit card usually being dispatched within a few days. Once you have been given the go ahead you should be able to set up direct debits and or standing orders online.
Are you able to check your balance?
Yes, you may be able to do this in a number of ways such as by using a cashpoint machine, phoning your bank or other financial institution or going online.
You may also be able to view recent transactions or previous statements online helping you to manage your account.You may also be able to set up things like standing orders and make one off payments online.
You may also be able to use an app on your mobile phone or tablet to view your basic bank account. This option enables you to access your account 24/7 wherever you can obtain an internet connection meaning that you can keep a close eye on your account.
Do you receive interest?
No, current accounts for bad credit scored customers would not normally receive interest on any credit balances. If there is an option to open say an instant access account with the bank or financial institution then you would receive interest on such an account.
Why would someone with a good credit rating open a basic bank account?
One of the reasons may be because he or she does not want to go overdrawn as they do not like the idea of borrowing money as they may be concerned that they could not pay it back. As you are not normally permitted to go overdrawn with such an account this is highly unlikely to happen.
How can you improve your credit rating?
Your credit score is calculated by the credit reference agencies based upon such things as whether you are on the electoral role and how you have maintained finance agreements. This credit score will impact on your ability to obtain the likes of finance such as credit cards, loans and a standard type of bank account as well as a mobile phone and insurance. The interest rate you are charged for credit cards and loans is affected by the quality of your credit rating.
You can improve your credit score by such things as: –
• Register on the electoral roll.
• Paying your landline/internet provider bill on time each month.
• Keep up repayments on a personal loan or hire purchase agreement.
• Keep within your credit card limit and make sure you make at least the minimum monthly repayment.
• Check that the information contained on your credit file is accurate and that there has been no fraudulent activity.
• Not having too much debt i.e. several credit cards whose balances are nearing their credit limit.
• Obtain a “credit rebuild” credit card and use it satisfactorily although be aware that the interest rate charged will be higher than a normal credit card.
Conclusion about current accounts for bad credit rated customers
As stated earlier, the services provided by current accounts for bad credit rated UK people should enable you to manage your day-to-day finances such as having the likes of your wages paid in, paying regular household bills by direct debit and/or standing order, using a debit card in shops and online and to withdraw cash at many ATMs.There are so many providers of such accounts that you may wish to spend some time looking at a few comparing the services offered and any charges that they may make.Opening an account is quick and simple.Obviously, if one of the basic bank accounts provided by the likes of the high street banks meets your requirements for which they do not charge to open or make a charge for providing you with their normal services and they are agreeable to provide you with one then why would you want to open one offered by another financial institution that charges you to either open and/or use one.