Being stuck with a bad credit score can make life very difficult. Not only is it almost impossible to get any type of loan, but it may also be a challenge to open an ordinary bank account.
Many banks and other lending institutions will not consider opening an account for a customer with a bad credit score, as they’re deemed too high risk. If you’re trying to get plan ahead for your future, this can have ramifications right across the board.
In the worst-case scenarios, you may be denied a rental agreement or have an employer rescind an offer of employment. So, what alternative financial products are available to those with poor credit histories.
Being stuck with a bad credit score can make life very difficult. Not only is it almost impossible to get any type of loan, but it may also be a challenge to open an ordinary bank account.
Many banks and other lending institutions will not consider opening an account for a customer with a bad credit score, as they’re deemed too high risk. If you’re trying to get plan ahead for your future, this can have ramifications right across the board.
In the worst-case scenarios, you may be denied a rental agreement or have an employer rescind an offer of employment. So, what alternative financial products are available to those with poor credit histories.
What Happens When You Have a Bad Credit Score?
The first thing to understand is that a bad credit score is not something that happens overnight. Poor credit scores are the result of an accumulation of bad financial habits.
Factors that come into consideration are varied, but even something as simple as consistently paying your bills late can hurt your credit score. On the flip side, if you have a long history of making credit card and loan repayments on time but hit a rough patch, you may only suffer a minor glitch to your credit score.
What Financial Products Can You Access With A Bad Credit Score?
A bad credit score doesn’t necessarily mean all financial products are off-limits to you. Accounts with no credit checks are readily available. A basic bank account and most prepaid card accounts function in the same way a regular bank account does, but it does come with restrictions.
You will not be offered a chequebook or an overdraft, which simply means you can only use the money that is in your account. You may be offered a debit card with these types of account, even with bad credit, but you will need to provide identification to open the account. Basic bank accounts still require proof of address and minimum deposit before you’re approved, which is why a prepaid card may be a better solution for those without this information.
Additionally, some banks and financial institutions will offer small lending products to people with bad credit scores, but you will need to be careful. These products often come with higher fees and interest rates. Suppose you must apply for a loan with a bad credit score. In that case, it is safer to stick with banks as many independent lenders can be pretty unscrupulous with excessive late fees and hidden costs that can accumulate very quickly and get you in even more trouble.
Correcting a Bad Credit Score
The best way to access a full range of banking products is to maintain a good credit score. However, even the most cautious people can encounter financial problems that result in a bad credit score.
If this happens to you, it is possible to correct a bad credit score by making sure you pay all your bills on time and regularly put aside some of your income into a savings account. It may not be an easy road, but if you track your spending and create a realistic budget, you can stay on a path to correcting a bad credit score and, more importantly, regain control of your finances.
Alternative Accounts with Suits Me®
If your credit score has affected your ability to change your account, then we’ve got you covered. Here at Suits Me®, we believe in financial inclusivity, meaning that we think everybody – regardless of their credit score, background, or financial position – should be entitled to a suitable facility.
Our accounts are personal e-money accounts that work similarly to a traditional bank account. You’ll gain access to your online account and our mobile app, where you’ll be able to manage your money on the go, 24/7.
We offer a whole variety of banking-like features including:
- The ability to set up standing orders and manage direct debits,
- Send money within the UK via a transfer, international transfers are available via a partner in the Suits Me® app,
- Gain access to our exclusive cashback reward programme where you’ll automatically get a percentage of your money back when you use your Suits Me® debit card with our retail partners.
Opening a Suits Me® account takes 3 minutes and you’ll gain access to your online account immediately so you can start managing your money. We don’t ask for proof of address or run a credit check. We accept 99.8% of all applicants – so if you’re looking for a suitable alternative solution apply today!
