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.
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 then you get charged $200 for your electricity bill.
With an overdraft set up, your account will go to zero when the $200 payment is made. The bank covers the full charge, and you'll have a $100 overdraft debt.
That's credit. You now owe the bank $100. Most banks charge a fee or interest on the overdraft.
If you have bad credit your bank may not offer an overdraft on your account. But you can still open an account.
Your credit report doesn't contain a list of your bank accounts, because these are not credit products.
Your credit report contains information like:
| Response | |
|---|---|
| Yes | 63.39% |
| No | 36.61% |
Credit agencies provide you with a credit score or credit rating. Scores come in bands:
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.
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.
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.
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.
So you don't need a good credit score to open a bank account. But improving your credit score is still a really good idea.
And it takes time to improve your credit score, so the sooner you start the easier it is.
It's common to have a few different bank accounts that each have a different purpose. Here's how you may benefit from having multiple bank accounts and the traps to avoid.
Find out what you need to know about new digital bank Up, including its innovative savings and transaction accounts.
Having a local bank account makes an international student's life easier and even saves them money.
A comprehensive list of the banks, building societies and credit unions trading in Australia.
What are virtual debit cards, how do they work and what benefits do they offer? Find out here.
For foreigners opening a bank account in Australia, the process is easy and user-friendly, and often comes with attractive deals and discounts on transaction fees.
You generally need to be 18 to open a new bank account online, and 14 to get a debit card in your name. Here are your options when you're a teenager.
It’s never too early to start saving, so opening a bank account for your baby can be a great idea.
These five steps cover everything you must know and do to open a bank account online.
Opening a joint bank account is a big step for any couple. Find out more about what to look for in an account and how to avoid the common pitfalls.
Hello,
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.
Regards,
Karen
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.
Regards,
Alison