Can I still open a bank account if I have bad credit?

Information verified correct on February 23rd, 2017

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.

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Rates last updated February 23rd, 2017
Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
St.George Complete Freedom Account
10% Cash back for online gaming purchases.
Waived account keeping fees when minimum deposit is met with no minimum balance.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Open More
NAB Classic Banking
$0 monthly account fees.
Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Open More
Bankwest Easy Transaction Account
Pay no ATM fees at over 10,000 ATMs in Australia (conditions apply).
Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $6 monthly fee applies. Unlimited free withdrawals at CommBank, NAB, ANZ, Westpac, St.George, BoM and BankSA ATMs. Open More
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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 $0 account keeping fees when you deposit at least $2,000 into your account each month. Otherwise, a $6 monthly fee applies. Unlimited Free withdrawals at Bankwest and CommBank ATMs in Australia. Open More
ING DIRECT Orange Everyday Account
$75 cash bonus up for grabs
Get a competitive ongoing variable rate when linked with a Savings Maximiser.
Visa $0 $1,000 $0 account keeping fees. Unlimited free withdrawals at all Australian ATMs if you deposit at least $1,000 per month. Open More
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 $0 account keeping fees if you deposit at least $1,000 per month. Otherwise, a $3 monthly fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Open More
Bank Australia mySaver Account
Ongoing, variable 2.60% p.a. when you deposit $10+ each month. Available on the entire balance and to customers under the age of 25.
N/A $1.30 Open More
Bank Australia Bonus Saver Account
Ongoing, variable 2.60% p.a. when you deposit at least $100 and make no withdrawals. Available on the entire balance.
N/A $1.30 Open More

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.

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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