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How Can I Raise My Credit Score in 30 Days?

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What You Need to Know About Building Credit and Second Chance Checking


Unfortunately, in life sometimes things just do not work out as planned. This can be especially true when it comes to money issues and our finances. While most people are filled with good intentions, we sometimes cannot fulfill promised financial obligations, which causes us to have negative marks on our credit report, resulting in a low credit score. Once our credit score reaches an unacceptable level, it is often difficult to obtain the necessary credit needed to get the things we need and want in life.

Thankfully, some banks and credit unions understand that bad things sometimes happen to good people, so they have come up with some creative ways for people to bounce back from previous credit and banking issues. Those who have had past banking problems and want to establish a better financial situation for themselves should search for a local bank or credit union that offers a second chance checking account when they can't get the approval needed for a standard checking account.

If you have had a bad bout of credit issues, you probably understand the variety of problems that can be created by previous banking errors. If so, good for you for looking for savvy ways on how to build credit and tips to correct those mistakes. A second chance checking account might be just the solution you are looking for to prove that you are now trustworthy enough to manage your own bank account and show that you are willing to make an effort to create a better financial reputation of creditworthiness.

Here is some helpful information about how to build credit and improve your rating to show that you are financially worthy so you can get back on the right track to a bright financial future. In addition, we've listed some facts about second chance checking accounts from us to help you learn more about how to manage your finances even if you have made mistakes in the past.




What is a Second Chance Checking Account Anyway?

A second chance checking account is a special type of bank account that is offered by some banks and credit unions to help people who may have had banking issues in the past. For those who have had things like unpaid overdraft fees, insufficient fund issues, and other common banking mistakes with previous bank accounts, it can be difficult to obtain approval to open a new checking account. It is often better to look at smaller, local banks or credit unions when it's time to open a second chance checking account, as many of the larger, national banks do not offer these types of accounts. Most of the time, these smaller community banks and credit unions have the ability to work with customers better and can offer more banking services than the larger financial institutions. Finding a credit union that can assist you in opening a second chance bank account now and maintaining it properly may provide the opportunity you need to restore your financial credibility so that you are able to open a regular checking account in the future.



What Might Lead People to Apply for a Second Chance Bank Account

People who would benefit most from a second chance checking account at a local credit union or bank include those that have financial hardships that may have caused them to improperly manage their finances. Here are some of the reasons people might apply for a second chance bank account at their local credit union:

Reasons to Apply for a Second Chance Bank Account

  • Unforeseen medical bills
  • Divorce, death, or other life changing event
  • Poor money and budget management
  • Loss of employment or decrease in wages
  • Money mistakes in your youth

If you have any of the following negative marks against your past checking accounts, second chance banking may be a great alternative for you.

  • Account overdrafts
  • Delinquent or unpaid negative balances
  • Involuntarily closed accounts

For more information on the benefits of a second chance bank account, review our blog "5 Situations Where You Might Apply for a Second Chance Bank Account."



Exactly How Long Does It Take to Build Credit?

Learning more about how to build credit includes knowing that a good credit score has to be earned and that it does take some time to build a good reputation of creditworthiness. It typically takes having an open and active credit account for three to six months before an initial credit score can even be determined. Establishing a solid credit history can be built successfully over the years with good money management skills. However, there are some things you can do to quickly increase your credit score if you need to rebuild your credit and improve your rating with the national reporting bureaus faster.

If you are asking yourself "how long does it take to build credit," review our blog that provides answers that exact question and more.



How to Build Credit in a Few Simple Steps

Building credit does not have to be a complicated issue at all and can be accomplished in a few simple steps. If you need to learn more about how to build credit or improve your current credit score, your bank or credit union offers solutions to help. From secured credit cards to credit builder loans that can help to boost your rating – there are many ways to build credit and improve your financial status. 

For more information on building credit, review our blog "How to Build Credit in 6 Simple Steps."




Finding the Right Second Chance Banking Options for You

When you realize that you need a second chance at managing your checking account, it is the perfect time to search for the right second chance banking options for you. It is important to find a program that works well for your situation and teaches you how to better handle your finances and create good money managing habits. Second chance checking accounts, like the ones offered to members of Allegiance Credit Union, are for those who have past bank account issues that are making it almost impossible to open a checking account now. These types of checking accounts allow members to start to build a new history of responsible money management, even if you have a negative record on ChexSystems due to an unpaid closure or NSF activity.

Not only will you be able to open a checking account to use to secure your money, but you can also connect with our expert financial advisor to help you form healthy financial habits. Signing up for the second chance checking account and help from our financial advisor will get you on the right path to creditworthiness and teach you how to properly manage finances and how to build credit.

For more tips on how to find the account that is right for you, review our blog "Finding the Right Second Chance Banking Options for You."



How Second Chance Banking Can Help Rebuild Your Creditworthiness

Second chance checking accounts are an amazing opportunity to help you rebuild your creditworthiness by giving you the chance to make good credit and banking choices that will help improve your credit score so you can eventually get a standard account. These types of “low risk” credit building accounts are set up to allow you another chance to prove that you can properly manage your finances by setting limits and having built-in restrictions to help prevent account holders from spending money they do not have. Limited functions of these accounts are put in place to help you be successful and create good financial habits. Products like second chance checking are there to help you better manage your money. With some time, it can help you eventually learn the concept of responsible banking and repair your banking history from mistakes in the past and get to a point of opening a regular checking account and getting other banking products.



A Few Features You Will Want to Look Out for When Shopping for a New Checking Account

While some checking accounts for those with credit issues may offer features and perks of standard checking accounts like direct deposit and debit cards, they often have restrictions on writing checks or online banking options. These accounts may also have excessive monthly fees. While it may not be fun to have to deal with these account restrictions, a second chance bank account can help show financial institutions that you can be a responsible customer.

These special types of bank accounts for those with past banking issues are different from typical checking accounts, so be sure to familiarize yourself with the features so you know about the various types of fees or restrictions of the second chance bank accounts. Here are some of the features you should know about second chance checking accounts before choosing an account.

For more tips on finding the online account that is right for you, review our blog "How to Find the Best Online Checking Account [10 Factors to Consider]."



Second Chance Checking Account Features

Overdraft Protection

Most second chance bank accounts have restrictions that limit spending to the funds that you have available, which protects you from overdrawing the account.

Account Fees

Be prepared for typical monthly maintenance fees like with some standard checking accounts. In addition, check for additional fees for things like purchases, account inactivity, deposits and more, which can really add up.

Minimum Balance Requirement

Many second chance checking accounts require that you make a minimum deposit to open the account in addition to a minimum balance you have to keep in the bank account in order to avoid fees.

Check Writing Privileges

Some second chance accounts do not offer check writing privileges to account holders. If so, they may charge a fee for each check written or limit the number of checks you can write on the account.

Online Banking

If online banking is important to you, be sure to check that your financial institution allows this feature with second chance checking accounts, as this option may not be available with your account or may have additional associated fees.

Once you responsibly maintain the second chance bank account for several months, most banks and credit unions will allow you the option to convert your second chance checking account to a standard checking account.

For more tips to determine if a second chance checking is right for you, review our blog "5 Questions to Answer Before Getting a Second Chance Checking Account."



First 3 Steps to Take Today to Build Credit Responsibly

Proven credit responsibility is the key to your financial future. In order to have the buying power you want and need to purchase homes, cars, and other important things in your life, a good credit score is crucial. In order to prove that you are ready and know how to build credit and show lenders that you are creditworthy, here are the first things you need to do.

3 Steps to Build Credit Responsibly

1st Step - Get a Job

While having a job does not directly affect your credit score, being employed full time does mean a steady source of income to meet your financial obligations, which is a major key in building credit. If you do not have the income to pay your bills, you will not be able to effectively build credit responsibly.

2nd Step – Pay Your Bills on Time

The key to building credit is paying your bills on time each and every month. A history of on-time bill payments is crucial for building credit and earning a good credit score. Be sure to pay all of your bills and credit obligations on time – even those that are not listed on your credit report - for the best results and reputation.

3rd Step – Open Accounts to Build Credit

In order to build credit, you must have accounts in your name that prove creditworthiness. Getting a secure credit card or applying at your local credit union for a small credit-builder loan are great choices. Once your credit accounts are established, be sure to pay on time because your credit building begins as soon as your bank or creditor reports the payment history to the major credit bureaus. The monthly reporting of your on-time payments is how your credit report and good credit history are created.



Building Credit and Second Chance Checking Accounts Go Hand in Hand at Your Local Credit Union

Second chance checking accounts help you better manage your money and pay your bills on time with access to bill payer tools and free mobile apps. Your credit history will get stronger the longer your credit accounts are open and are paid on time. Working now on building credit and being financially responsible is the main way for you to have the financial freedom and success you want and need in the future. Establishing a second chance checking account with Allegiance Credit Union is a great way to start getting your finances back in order. Contact us today to learn more.


You may be interested in the following:

Get a Second Chance Checking Account

Get online banking & bill pay, mobile banking, text alerts, e-Statements, Visa® debit card all FREE when you sign up for Second Chance Checking at Allegiance Credit Union!
Join Now

Apply for a Credit Builder Loan

With a Credit Builder Loan, you borrow against your savings at Allegiance and receive low-rate financing. Plus, timely payments on your secured loan can help build your credit history.
Apply Now

Secure Credit Card

The secure credit card provides an excellent opportunity for someone starting a credit history or for someone who has been turned down for a credit card.
Apply Now