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Will I need a good credit score to open a basic bank account?
No — basic bank accounts are designed to be a money management solution for people with a poor credit report.
When you apply for a basic bank account, providers may run a credit check. But this is really only for ID purposes and to better understand your circumstances. And, unlike with a standard current account, a returned bad score will not preclude you from opening a basic current account.
The provider may also only carry out a credit search which – depending on whether it’s a ‘hard’ or ‘soft’ search – may or may not be visible on your credit report.
We’ve set down how our listed banks treat credit scores but you can find out by asking the bank at the point of your application.
Are basic bank accounts free?
A basic bank account is free to open and manage. And you can’t be charged for failed payments or an overdraft, as it won’t offer the facility.
However, if you step outside the basic banking parameters such as by withdrawing cash from an overseas ATM, or carrying out a same-day payment transfer (CHAPS), the regular associated fees will apply.
Can I get an overdraft with my basic current account?
Overdrafts are a form of borrowing and are only available on regular or ‘standard’ current accounts – and for these you will need to pass a credit check.
As basic bank accounts don’t require you to pass a credit check, you will not be offered an overdraft.
Can my basic bank account be closed?
The bank is within its rights to close your basic bank account. But it will only do this if you violate its terms and conditions, opened it using false information, or use it for fraudulent activity.
Your bank may also upgrade the account if your circumstances change, and you become eligible for a standard account. The bank will give you written notice that this is happening.
How long does it take to open a basic bank account?
To open a basic bank account you will need to provide some personal details, such as your full name, age, and address.
There are a few different ways to open the account – in person, by telephone, by post, or online – with options available depending on the provider. Completing an application is usually quick, so long as you have these details to hand.
Are there any alternatives to a basic bank account?
High street banks are not the only option if you need a bank account that can be opened with poor credit. You could also try a credit union.
Credit Unions are best-known for offering low interest loans, but some — including London Mutual Credit Union, Darlington Credit Union, and Central Liverpool Credit Union — also offer current accounts called Engage accounts. These are accounts that anyone can open, irrespective of their credit history.
Engage accounts offer similar benefits to a basic bank account: you can send and receive money, manage regular payments, and pay bills. You’ll also get a debit card, but this must be pre-loaded with money before use. To open an Engage account, you’ll need to join a credit union and pay £2 a month in account management fees.
Bear in mind that money held on an Engage card is not covered by the Financial Services Compensation Scheme (FSCS) which protects the first £85,000 of your cash if the bank was to fail.
If you would sooner try your chances with a standard current account first, rather than plump for a basic bank account or Credit Union, it might be worth heading to a digital or online-only bank such as Starling or Monzo.
These banks only tend to carry out a ‘soft’ credit check, which will not be visible to other lenders. So if you are turned down, there’s no harm done.
Can I switch to a different basic bank account?
You are free to switch between basic bank accounts at any time and the Current Account Switch Service makes this process simple and risk-free. It means that, when you open the new account, all your regular incoming and outgoing payments are transferred automatically, and the old account is closed for you.
Can I upgrade a basic bank account?
If your financial circumstances improve, you may be able to upgrade from a basic to a standard current account.
Whether you are eligible for a standard account depends on your individual circumstances and the bank’s specific acceptance criteria. If you want to upgrade, get in touch with your bank directly.
