How to Open a Business Checking Account With Bad Credit

Key Takeaways

  1. Your credit score and previous banking history influence whether you’re approved for a business checking account.
  2. ChexSystems is a reporting agency that scores consumers on how they manage their checking and deposit accounts.
  3. Business owners with poor credit have options when it comes to opening a business checking account.
  4. If your ChexSystems report becomes a roadblock, you can dispute any incorrect issues and/or settle any debts in order to increase your odds of opening an account.
  5. Alternatives to opening a business account at traditional banks include second chance accounts from banks that don’t rely on Chexsystems such as Wells Fargo.
How to Open a Business Checking Account With Bad Credit

If you’re starting a business, one of the first things you’ll need to do is open a business checking account. That means forming an official business and getting an employer identification number (EIN). Once you have that, you can start applying for accounts with local banks and credit unions, providing an opening deposit and your incorporation documents.

In some cases, poor credit can make opening a bank account harder, but there are still options available.

How Does Personal Credit Affect Opening a Business Checking Account?

When you open a bank account, the bank will want to make sure you’re not going to do things like constantly overdraft the account, bounce checks, ignore fees, or even commit fraud. They may take a look at your personal credit to see if you have a history of bad financial practices.

While bad credit might give you some trouble when opening a business checking account, the real thing to worry about is your Chexsystems report. You can think of your Chexsystems report as like your credit report, but with a stronger focus on banking activity, such as closing accounts with a negative balance or consistently overdrafting your account.

A bad credit score may make a bank ask more questions before letting you open an account, but a bad Chexsystems report may bar you from opening an account entirely.

How To Open a Business Bank Account With Bad Credit

If you have bad credit, there are a few things you can do to make it easier to open an account.

Form a Limited Liability Company (LLC)

When you form an LLC you receive an employer identification number (EIN) that you can use to identify your business. It also lets you separate your business and personal credit.

Banks may be more willing to work with a more formalized business, even if its owner has some issues with their credit.

Improve your credit score and Chexsystems report

If your credit is blocking you from opening an account, the obvious thing to do is try to improve your credit score. This can take time but will pay off in the end by letting you open an account and saving you money on loans.

Work with a second-chance bank

Some banks, called second-chance banks, specifically target customers with poor credit or negative info on their Chexsystems report. They give those people a second chance to open a bank account and use it well.

They often charge higher fees but can be worth working with because it gives you the opportunity to clean up your credit and Chexsystems report.

Work with a personal banker or local bank or credit union

Personal bankers and local banks are often better at working with you than a larger bank chain that has millions of customers. If you can speak to an employee directly about your situation, they may be able to help you open an account.

What is ChexSystems?

ChexSystems functions as a consumer reporting agency utilized by banks to assess an individual's personal banking history, much like how major credit bureaus analyze credit histories.

This service comprehensively reviews both past and existing bank accounts, specifically examining aspects such as overdrafts, unresolved bank charges, and instances of returned or fraudulent checks. Negative incidents remain on your ChexSystems report for a maximum of five years.

Your consumer banking history is condensed into a three-digit score, ranging from 100 to 899. Similar to consumer credit scores, a higher ChexSystems score indicates lower perceived risk.

What You Need to Open a Business Bank Account

Opening a business bank account requires specific documentation. While the requirements may vary slightly among financial institutions, generally, you'll need the following:

  • Employer Identification Number (EIN) or Social Security number.
  • Personal identification, such as a driver's license or passport.
  • Business license.
  • DBA (Doing Business As) certification.
  • Corporate documents, like articles of incorporation or a partnership agreement.

If you have credit or ChexSystems concerns, there are two approaches to open a business account:

  • Establish a banking relationship: Contact a business accounts representative at a local bank or credit union, discussing your credit or past checking account issues. Some may not require credit inquiries or ChexSystems reports, offering basic accounts to help you rebuild credit over time.

  • Explore online options: Online banks often provide straightforward business checking accounts without credit checks or excessive fees. Consider these as well.

Additionally, some financial institutions offer "second chance" checking accounts, assisting individuals with past banking difficulties. These accounts may entail a monthly fee and lack certain features, but they provide an option for obtaining a business account.

How to Improve Your Credit Score

Even after opening a business banking account, it's essential to work on improving your credit and banking history for future flexibility as your business grows. Here's a step-by-step guide:

  • Establish business credit: Begin by opening a dedicated business bank account to separate business and personal expenses. Apply for a business credit card and use it responsibly each month. If your credit is less than perfect, consider a secured credit card to build positive credit history.

  • Improve personal credit: Since banks and credit unions often use your personal credit as a reference, it's crucial to enhance your personal credit. Pay bills on time, reduce revolving debt, and avoid unnecessary credit inquiries. Regularly check your free credit report and score to identify areas for improvement.

  • Review your ChexSystems report: Prior to applying for business accounts, check your ChexSystems report, as issues can hinder your banking options. You can access your report free of charge once every 12 months. If you discover inaccuracies, dispute them, and resolve any outstanding matters, such as unpaid fees.

5 of the best business bank account with bad credit

If you’re in the market for a business bank account that is available to people with bad credit, the best options for business banks are:

Minimum opening deposit Monthly fee Perks
Novo $50 None Integrates with popular business tools like Shopify and Quickbooks
BlueVine $0 None Streamlined website and app
Nearside $0 None Earn 2.2% cash back on purchases, business loans up to $10,000 available
NorthOne $50 $10 Integrates with popular business tools like PayPal, Quickbooks, and Gusto
Wells Fargo $25 $10 Network of 12,000+ ATMs and many physical branches, Access to other banking and lending services


Novo is a fee-free online bank that doesn’t look at your credit or your Chexsystems report when you apply for an account. It also offers reimbursements for any ATM fees you pay each month.


BlueVine stands apart from the competition thanks to the high interest rate it offers on checking account balances. It also keeps fees low with no monthly fees or minimum balance requirements.


Nearside is an online business bank that offers some unique features. It integrates with many popular business applications and even offers cash back on your debit card purchases.


Though it charges an unavoidable $10 monthly fee, NorthOne makes the cost worth it by offering everything you need to manage your company’s finances from one place. Its service can help you budget, save for tax season, pay your vendors, and do your bookkeeping.

Wells Fargo

If you want to work with a large bank that has physical branches, Wells Fargo is a solid choice. The minimum deposit is just $25 making it easy to open an account.

Bottom Line

In summary, while opening a business bank account can pose some challenges, even individuals with poor credit can achieve it.

The most crucial initial step is to embark on the journey of improving your credit, recognizing that it may require time. In the meantime, consider options like second chance banking, exploring credit unions, or providing a larger deposit as temporary solutions.

Conduct some research into different financial institutions, their specific prerequisites, and the steps you can take to enhance your eligibility for a business banking account.

Frequently Asked Questions

Can I open a business account with bad credit?

Yes, it is possible to open a business bank account with bad credit. Some banks may ask some additional questions and there are a few that won’t let you open an account but there are plenty that will be happy to give you a checking account.

Do they run a credit check to open a business bank account?

Whether a bank runs a credit check when you try to open a business bank account depends on the bank’s policies. Some banks will check your credit and some won’t. However, almost every bank will look at your ChexSystems report.

What are second-chance Business Bank Accounts?

Some banks provide second-chance bank accounts, often without checking your ChexSystems report or overlooking past financial mistakes. However, these accounts often come with monthly fees and may lack essential banking features. Exploring alternative options may be advisable if available.

How do you dispute Chexsystems?

You have the option to dispute an item on your report directly with ChexSystems or with the financial institution that reported the account.

How long does information stay on Chexsystems?

Accounts reported to ChexSystems remain on the report for five years, even after outstanding balances are paid.

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