Just because you have a less than perfect credit history doesn’t mean you can’t open a bank account.
Can I still open a bank account if I have bad credit? Thousands of Australians with blemishes on their credit files are eager to know the answer to this question, and the good news is that a bad credit rating won’t necessarily stop you from opening a bank account.
However, a poor credit history can have a big impact on your ability to access a wide range of financial products, so it’s important to take any steps possible to make sure your credit file is in the best possible shape.
If you currently have bad credit, your bank account will probably be the most important tool in helping you repair it.
Everyday Transaction Account Offer
Enjoy $0 monthly account fees on the NAB Classic banking account.
Free use at over 3,400 NAB and RediATMs in Australia
24/7 Mobile Banking, including Quick Balance checker
Tap and Pay for Android
Free linked NAB Visa debit card with payWave
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Read the NAB Classic Banking terms and conditions.
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Rates last updated August 29th, 2016
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NAB Classic Banking
Tap and Pay with your Android Phone using NAB Pay.
No minimum deposit required.
Visa
$0
$0
No monthly account fees, ever. Free use at over 3,400 NAB and RediATMs Australia wide and $0 overdrawn fees.
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ING DIRECT Orange Everyday Account
$75 cash bonus.
Get a competitive ongoing variable rate when linked with a Savings Maximiser.
Visa
$0
$0
No monthly fees, and you can use any ATM in Australia for free when you deposit $1,000 each month e.g your salary.
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HSBC Day to Day Transaction Account
Your Visa debit card unlocks special privileges worldwide with the HSBC home&Away Privilege Program.
Visa
$0
$0
$0 monthly fees. No ATM fees at over 3,000 HSBC, Westpac, St.George, Bank of Melbourne and BankSA ATMs.
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Bankwest Qantas Transaction Account
Earn Qantas Points on eligible purchases and on your account balance.
Conditions apply.
Mastercard
$0
$2,000
No monthly fees when you deposit at least $2,000 into your account each month. Free access to Bankwest and CommBank ATMs in Australia. No overseas ATM withdrawal fees (charged by Bankwest) though third party fees may apply.
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St.George Complete Freedom Account
Additional $50 to new accounts (conditions apply).
$0 ATM withdrawal fee via St.George's Global ATM Alliance.
Visa
$0
$2,000
No account keeping fees, if you deposit $2,000 per month plus no minimum balance required. No ATM fees when using St.George, Westpac and BankSA ATMs.
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Bankwest Easy Transaction Account
Pay no ATM fees at over 10,000 ATMs in Australia (conditions apply).
Mastercard
$0
$2,000
Minimum deposit of $2,000 per month needed to waive the monthly account fee otherwise $6 monthly fee applies. No ATM fee applicable at Bankwest, CBA, NAB, ANZ, Westpac, St.George, BoM and BankSA ATMs in Australia.
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ANZ Access Advantage
Apple Pay now available.
Unlimited transactions at ANZ ATMs, EFTPOS, Internet, Mobile and Phone Banking.
Visa
$0
$2,000
No monthly account fee when you deposit at least $2,000 per month. Other fee waivers available based on your personal situation.
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St.George Express Freedom Account
Convenience of cardless cash and shop securely with your Visa debit card.
Customise SMS and email alerts.
Visa
$0
$1,000
No ATM fees when using St.George / Westpac / BankSA ATMs. No monthly service fee if you deposit a minimum of $1,000 per month otherwise $3 monthly fee applies.
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What information is in my credit file?
Your credit file contains a wide range of information about your financial history, which helps banks and other lenders determine whether you can access specific banking products and services. The following information is usually included:
Your name, address and contact details
Any previous credit applications you’ve made in the past five years
Any current credit accounts held in your name
Any credit defaults, for example late or unpaid bills, from the past five years
Any court writs or summons from the past four years
If you’ve filed for bankruptcy in the past seven years
Any clearouts from the past seven years
If you’ve managed your finances effectively, your credit file will be clean and will improve your borrowing power if you apply for a home loan or other credit. However, if you’ve made any financial mistakes in the past, these could come back to haunt you and limit your ability to access a wide range of financial products.
Can I open a bank account if I have bad credit?
If you have a bad credit history, rest assured that this won’t affect your ability to open an ordinary bank account. Banks and other financial institutions only carry out credit checks when you apply for a line of credit, such as a home loan or personal loan, so your credit history won’t come into play when you open an everyday transaction account or a savings account.
In fact, opening a savings account is a great way to demonstrate that you have improved your financial behaviour and it can actually help boost your chances of accessing credit. If you can show a history of making regular deposits into a savings account for six months or more, you can improve your standing in the eyes of the bank and show that you have good financial discipline.
This could come in handy if you ever need to apply for credit, for example in the form of a home loan or credit card. While a bad credit file won’t hurt your chances of opening a savings or transaction account, it will have an effect on your ability to access credit.
What about accessing credit?
A bad credit history can have an impact on your ability to access a wide range of financial products, including:
Home loans
If your credit history contains any blemishes, lenders may impose a higher interest rate on your loan or even decide that you pose too much of a risk of defaulting on your loan and refuse your application altogether. However, our guide to applying for a home loan with bad credit can help you get approval.
Personal loans
If your credit history is less than perfect, accessing credit through a personal loan can be difficult. Not only might you struggle to find a lender willing to offer you financing, but if you do, you may be charged a higher interest rate on your loan. Check out our guide to bad credit personal loans for more details.
Credit cards
You may also find it hard to qualify for the vast majority of credit cards due to your poor credit file. There are special credit cards available for people with bad credit, but these usually feature higher interest rates and increased fees.
One option you may be able to consider if you need to access credit is a payday loan. These loans offer a short-term credit solution, but their high interest rates and fees make them a risky prospect that should be avoided if possible.
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How to avoid bad credit
Even if your credit history isn’t perfect, don’t despair. There are plenty of things you can do to improve your credit rating and boost your financial capabilities. These include:
Paying off debts
Repaying any debts you may have is an essential step in improving your credit rating and boosting your appeal to lenders whenever you apply for a new financial product. You may need to work out a payment plan to help you get back in the black, or consider consolidating your debt to make your payments more affordable.
Paying bills on time
Whether it’s your credit card or your electricity bill, make sure to pay the outstanding amount before the due date. This will show the banks that you are reliable and financially disciplined, and will also prevent any black marks being recorded against your name.
Limiting loan applications
Every time you apply for a loan or credit of any sort, it shows up on your credit file. Multiple loan applications are not looked upon favourably by the banks, so don’t make any unnecessary applications for credit.
Using a debit card
Debit cards are similar to credit cards in that they allow you to shop online and can be used at almost any merchant. However, they do have one key difference: you spend your own money, not money loaned to you by the bank. Using a debit card instead of a credit card will ensure that you don’t run up a large debt that you can’t afford to pay off.
Checking your credit file
It’s a good idea to regularly check your credit file to find out exactly what is recorded there. You can then take steps to repair your credit rating.
Getting help
If you wish to dispute a black mark on your credit file, you may want to enlist the help of a specialist credit advocacy service, which can help you establish whether any blemishes on your file were recorded lawfully.
Managing your finances
If you pay off your credit card on time, make regular deposits into a savings account, pay all your bills before they’re due and generally make an effort to take charge of your finances, your credit rating will only improve.
With some forward planning and a careful approach to managing your finances, you can repair your credit history and access the financing you need to achieve your financial goals.