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Can I get a bank account with little or poor credit history?

If you have little or poor credit history, there are options available to you when it comes to storing and managing your money.

This guide will explain how your credit history can have an impact on the bank accounts available to you, and how you can prepare to open a bank account. You’ll also learn how you can manage a bank account to improve your credit rating.

Do banks run a credit check when opening an account?

When you apply for a credit card or a loan, the bank has to carry out a credit check to determine how much they can lend to you. Your credit rating will determine the risk of lending money to you.

A credit check is usually required for opening a current account with most banks in the UK. This is because there may be an overdraft facility available, which is another form of borrowing money.

However, if you apply for a basic bank account, most banks will not require a credit check. If they do check your credit history, the results won’t usually impact your application.

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Bank accounts for poor or no credit history

Basic bank accounts give you a place to store and deposit money, pay bills and use online banking - even if you have poor or no credit history.

Basic bank accounts are different from current accounts as they don’t have an overdraft facility. This makes them less risky and reduces your chances of getting into debt. They are sometimes known as no credit check bank accounts.

Many UK banks offer a basic bank account option. They are usually available with no monthly account fee, give you access to online banking and come with a debit card. You’ll most likely be able to deposit money, get paid, pay bills, withdraw cash at cash machines and set up Direct Debits.

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Can I be refused a basic bank account?

It is unlikely that you will be refused a basic bank account because of your credit rating.

Although the bank may not be checking your credit score, they will still need to identify you with your ID and address and conduct fraud checks to make sure you are who you say you are. Out-of-date or invalid documents won’t be accepted so make sure all your identification is correct and up to date.

You can find more information on what documents you can use as proof of identity and proof of address in our FAQ section.

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Tips for managing your basic bank account

To get the most out of a basic bank account, there are a few things you can do, such as making sure you regularly check your balance, whether that’s through online banking, mobile banking, in branch or at a cash machine. It is also important that you are aware and keep on top of your income and outgoings, to avoid any money leaving your account that you can’t afford.

If you make regular payments like energy bills or rent, you can set up Direct Debits and standing orders.

This will allow you to budget better, knowing what and when regular payments will leave your account will ensure you don’t risk missing any.

For more help on adding up your incomings and outgoings, have a look at our interactive budget calculator.

Can a bank account help to improve my credit score?

Opening a standard bank account, like a current account, can improve your credit rating.

You can work towards this by setting up regular Direct Debits (that you can afford to pay), and ensuring that you pay your bills on time.

You can also improve your credit score by making sure your bank has the correct and updated contact information and address.

If you live in a rented property, you can be a part of The Rental Exchange by Experian. This helps non-homeowners to build up their credit score.

Can I get a bank account if I’m unemployed?

Banks may ask about your employment status when you apply for a basic bank account, however, this won’t impact their decision or your chances of being accepted. This means that you may need to provide details of your employment and your income when applying - even if you are unemployed.

So, it’s likely that you can get a bank account when you are unemployed. However, you should look around to see which type will suit your needs best.

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What you should know before applying for a new bank account

It helps if you have been living at the same place for a longer period of time, along with having a consistent employment history, when applying for a new bank account. However, if you have recently moved or changed your address, having knowledge of your address history will still benefit you in the application process as it will help the bank carry out their checks.

Always check the eligibility criteria of any bank account you apply for. If you haven’t checked the eligibility criteria properly, you could get rejected and may need to apply for a new account.

For more money advice, contact details and a list of helpful websites, please visit our financial support page.

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