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Yes, you can open a bank account if you have bad credit

Your credit score affects your ability to borrow money with a credit card or loan. It doesn't impact your ability to access your own money with a bank account.

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

Having a low credit score or a history of credit troubles won't stop you from opening a bank account. A bank account is something you can use to hold and spend money: it is not a credit product.

Banks only worry about your credit score when you apply for:

With a bank account you're using the money you put into the account. There's no risk to the bank.

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Westpac Choice
monthly fee
ATM withdrawal fee
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  • Monthly fees: $5

Westpac Choice

Overdrafts are a form of credit

The only time a bank account comes close to offering you credit is with an overdraft facility.

Let's say you had $100 left in your bank account. And you have a direct debit set up for a $200 bill. With an overdraft set up, your account will go to zero when the $200 payment is made. The bank covers it, and you'll have a $100 overdraft debt.

This means you'll owe the bank $100, which the bank will take as soon as any money enters your account. Overdrafts come with a fee and interest charges if you don't pay the money back.

Your bank may not offer an overdraft facility if you have bad credit. But you can still have an account.

Finder survey: Do Australians know what a good credit score is?

Source: Finder survey by Pure Profile of 1016 Australians, December 2023

What information is in my credit report?

Your credit report doesn't contain a list of your bank accounts, because these are not credit products.

Your credit report contains information like:

  • Your name, address and contact details.
  • Previous credit applications you've made.
  • Any current credit accounts held in your name, including repayment history.
  • Any credit defaults, including missed loan repayments and late or unpaid bills.
  • Any bankruptcies or debt agreements in your name.
  • Request for your credit report from credit providers.

How does my credit score affect my finances?

Credit agencies provide you with a credit score or credit rating. Scores come in bands:

  • Excellent
  • Very good
  • Good
  • Fair
  • Poor

Note that agencies have different scoring ranges and names for these bands, but they're comparable.

A fair or poor credit score won't stop you from opening a bank account. But it will make it harder to get approved for a personal loan, a home loan or a new credit card.

Luckily, there are steps you can take to improve your credit score.

Credit cards

If your credit score is low enough you may not qualify for a credit card at all. Or you may have to settle for a card with a lower credit limit.

Personal loans

In Australia, the rate on your personal loan is determined partly by your credit score. This is called risk-based pricing.

Borrowers with good or excellent credit scores can get lower interest rates.

Home loans

Having a higher credit score won't get you a better home loan rate. But lenders do check your credit history when you apply for a home loan.

A high credit score may increase the amount you can borrow.

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2 Responses

    Default Gravatar
    KarenJune 21, 2022


    CBA has closed our Company account with no explanation; we are desperate to find another bank to pay our designers and grow our startup business. Any advice would be really appreciated.


      AlisonJune 23, 2022Finder

      Hi Karen,

      I’m sorry to hear about what happened. You may want to get in touch with CBA first and see if you can resolve the issue. Alternatively, you can also check business bank accounts on our website, compare, and find the right one for you.


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