Lenders use a consumer’s credit score that is based on the information in the borrower’s credit report so they can determine the risk that a individual poses to them before they will decide whether or not they will approve a consumer for credit. The higher the score score, the lower the risk it poses to a creditor. The information that is contained in a person’s credit report is used to figure out a consumer’s FICO score which can between 300-850. The higher the score, the easier it is to rent an apartment, obtain a loan, or get lower insurance rates.
However, when a individual is denied a savings or checking account, many of them come to the conclusion that they were denied because of their bad credit history. Consumers should know that most banks and credit unions don’t use a person’s credit score from TransUnion, Equifax, or Experian. Instead they base their decision on a applicant’s Chexsystems report which is another type of consumer reporting agency. Unlike a credit report that records a person’s repayment history, Chexsystems records a person’s past banking experiences such as overdrawing of accounts and never re-paying the balances or the bouncing of a check. These black marks reported to Chexsystems can last for up to five years.
Unfortunately, when a consumer is unable to open a checking account, it forces them to rely on using prepaid cards for direct deposit for their payroll checks — but financial institutions offering these types of prepaid cards charge for all kinds of things that a traditional checking account customer get for free. Fees can be charged for loading funds onto the card, speaking to a customer service representative, point-of-sale purchases, and ATM withdrawals. These terms can vary between different prepaid cards, and while some are not as bad as others, the average fee can range from $1 to $5 for a wide variety of typical customer actions. This will almost always add up to far more than the average fees associated with a checking account.
Using a check cashing service can be even worse that those fees charged by prepaid cards. Fees charged using a check cashing service can be up to 3 percent of a employee’s paycheck. For example, at a 3 percent check cashing rate, a employee earning $50,221 a year is going to pay $1,506.63 a year in check cashing fees. That’s a lot of money just to cash a payroll check!
Our staff at InfoAviator Publishing is taking a step towards helping Arizona residents break free from this vicious cycle that keeps hard working employees from saving money. We have created a list of local credit unions in the state of Arizona that are willing to give a consumer a fresh start or second chance checking account. Our staff along with our loyal viewer submitted list can be reviewed at http://answers.infoaviator.org/?qa=466/arizona-non-chexsystems-banks-offering-checking-accounts. Additionally, consumers can view our staff verified nationwide list of real well-known banks offering fresh start and second chance checking accounts at http://infoaviator.org/finance/checking-accounts/2014/05/28/how-to-open-a-second-chance-checking/.