Best Bank Accounts for Bad Credit in 2023

Finding a bank that will accept you might be difficult if you have a low credit score. If that's the case, you're in good company; over a million individuals in the UK don't have access to formal financial institutions. 

However, a simple bank account is the answer. In this article, we will explain what they are, what you need to know, and which accounts we recommend until your credit score improves.

Service	Score	Register
1. Starling Bank	★★★★★	Click Here
2. Monzo	★★★★★	Click Here
3. Revolut	★★★★★	Click Here
4. ThinkMoney	★★★★★	Click Here
5. Cashplus Bank	★★★★★	Click Here

At a Glance, Pros and Cons

Let’s look into the pros & cons of the UK’s top best bank accounts for bad credit?

Pros

✅ No credit check is normally required to open one.

✅ To create an account, you must provide identification and evidence of residence.

✅ Daily banking with a basic bank account is free, however there may be other expenses.

✅ Many individuals open one to help them manage their finances, not simply those with low credit scores.

✅ Basic bank accounts provide protection of up to £85,000 per account holder per bank.

Cons 

❌ You may need to inquire about these types of accounts, since some banks do not advertise them.

❌ Banks will still do identification checks, and a conviction history may negatively impact your loan application. 

Top bank accounts for bad credit — Reviews

Perhaps you do not have a perfect credit history. Perhaps you have defaulted on payments in the past or established an IVA with your debtors. The process of opening a new checking account might seem daunting if you aren't prepared.

We looked into it, and found out that you may create a bank account without a credit check, so that the process is less stressful regardless of your credit history. We've put together a tutorial on how to create a business account with poor or no credit if you're in the market for one.

Understanding basic bank accounts… 

For people with less-than-ideal credit, basic bank accounts are a good option. These accounts, as the name indicates, provide a place to keep your money and pay payments, but they do not have overdrafts or other features that are common with traditional bank accounts.

A simple bank account nevertheless provides you with the following benefits:

✔️ A debit card that may be used at any ATM in the United Kingdom without incurring any fees.

✔️ Bill payment options include direct debits and standing orders.

✔️ Bank accessible on your phone.

But here's what you won't get:

❌ Anything for writing checks.

❌ Overdrafts.

❌ Rewards such as rebates and interest payments.

That said, here are our favourites 👇

1. Starling Bank — Best bank account for those with poor credit (no hard checks)

Once your account has been verified, you can start using it right away by connecting it with services like Apple Pay or Google Wallet. Users may deposit money, withdraw cash, manage expenses, make and receive payments, and save money using this account. There are also no hidden costs while using it overseas.

An arranged overdraft of £1,200 would incur interest at a rate starting at 15% EAR variable. And there probably is no cash back on purchases.

Pros

✔️ No recurring costs

✔️ Completely online registration

✔️ 24-7 help desk based in the UK

✔️ Use the ‘Settle up' function to fairly divide household expenses

✔️ Interest accrued is paid monthly

✔️ Available loans and overdrafts

Cons

❌ Extremely high interest rate

❌ Money spent on converting currencies

❌ No points system

2. Monzo — No credit check is necessary

You'll need to download the app, fill out some personal information, and prove your identification by filming a selfie video and an ID photo, but you won't need to submit any evidence of residence. 

Tip 💡: Users cab divide their pay cheques across many accounts for spending, saving, and paying bills, and they don't have to pay any fees to make international transactions.

Pros

✔️ Simple to use 

✔️ It's helpful for setting financial goals and monitoring progress

✔️ Integrated backup system

✔️ Free international transaction fees

✔️ Face-based authentication in a sleek app

✔️ Loans and overdrafts are offered

Cons

❌ £200 limit on fee-free ATM withdrawals made outside the EEA

❌ Deposit charge at PayPoints

❌ £1,000 only in cash every six months

❌ No loyalty program

3. Revolut — Excellent alternative for poor credit (not an official UK bank)

There is no credit available for this account, thus there is no need to apply for an overdraft. If you don't have enough money in your account to cover a purchase, the transaction should be denied. You will be alerted if your account balance drops to zero and given up to seven business days to replenish it.

Helpful Hint 📓: Despite not offering cash-back bonuses as some other cards do, this one lets you make free international transfers between 29 different currencies, make cash withdrawals from ATMs, pay using contactless technology, and set up recurring payments.

Pros

✔️ Fees paid by the client when travelling abroad are minimal

✔️ Simple implementation

✔️ Get paid for your purchases

✔️ Establish financial plans and budgets

✔️ Purchase using a “virtual card”

✔️ It is simple to send money abroad

✔️ Children can open a ‘Junior' account using this family's account

Cons

❌ A one percent foreign exchange fee on all weekend purchases

❌ Withdrawals of up to £200 per month, both in the UK and overseas, are fee-free

❌ You are unable to make deposits of cash or checks

❌ There is a cost for processing your bank card

4. ThinkMoney — Wins for low-commitment and requirements

The Post Office accepts cash and checks in addition to online and mobile account management. In addition, when you deposit funds into your account, they will set aside a portion of your funds for scheduled payments like bills. 

You'll seem more trustworthy to lenders and credit bureaus as a result. The account comes with a monthly charge of £10.

Pros

✔️ Credit checks are not required

✔️ Simple application process

✔️ Guarantees on-time bill payment, which is good for your credit

✔️ Put money down to pay off debt without worrying about meeting a minimum financing requirement

Cons  

❌ Cost per month

❌ Fewer options for your account

5. Cashplus Bank — Simple sign-up through phones

Rather, you'll find out the result of your online application immediately and, if approved, get your debit card in three to five business days. The account costs £5.95 per month and may be managed digitally (through the website or mobile app) or in person (at the Post Office) for a £5.95 charge. 

Also, there is no fee for making up to nine electronic payments each month, however there is a fee for each ATM cash withdrawal. Card issuance costs money, too. Cashplus Creditbuilder, an optional add-on to the account, is great for those who are just starting out or have a limited credit history. 

All in all, if account holders complete their monthly payments on time, their credit scores may increase in as little as a year. That’s the hard part! 

Pros

✔️ Simple application process

✔️ Credit checks are not required

✔️ Credit-building tools

Cons

❌ Cost per month

❌ Specific transaction fees

❌ Fewer options for your account

Britain’s top business bank accounts for bad credit — Buying Guide

Let’s explore these services further as a topic. 

Can I get a bank account without a credit check?

The answer is yes. 

Cashplus and ThinkMoney are two examples of UK banks that specialised in opening personal checking accounts with no credit check. However, you should know that there is often a monthly fee and additional charges associated with this sort of account.

Some of the younger challenger banks provide digital-only accounts that are free to start and don't need a credit check until an overdraft is requested. The more conventional financial institutions also offer “basic bank accounts”, which are essentially free checking accounts with less amenities. Below, we'll take a closer look at the last two possibilities.

What to do if you have poor credit and want to get a checking account

Most checking accounts have an overdraft option, which is why credit checks are standard procedure. You have two major choices if you are currently working to improve your credit but would want to avoid a credit check at all costs:

• Challenger banks. Opening a complete checking account with most app-only banks is possible. Your credit will not be checked, but you will need to provide proof of identification.
• Regular accounts. They're offered by the majority of conventional banks, but you may not know it. They have all the same functionality of a standard UK bank account, without an overdraft.

Both are viable choices, but which one is best for you depends on your individual banking needs and preferences.

Challenger banks

There is an abundance of options when it comes to new digital-only banks in the UK, many of which offer sleek applications and a simple banking experience. 

Revolut is incredibly affordable if you also need to transfer money overseas pretty often, and some of the more well-known ones are Monzo and Starling, both of which are fully licensed banks. 

These banks not only let you create an account regardless of your credit history, but they also provide a few extra services that may help you maintain your financial health.

• Incredible software for mobile devices. You no longer need to turn on your computer to use all of your banking services. The best apps for smartphones are all listed here.
• Cost-control mechanisms. You can track your spending and see exactly where your money is going with the help of several different applications that do this for you automatically. Investigate the mobile financial management applications available.
• Space-saving design. Separate sub-accounts allow you to save for certain purposes, and you can even have your banking app automatically save your spare change.

One drawback is that, as you would expect, they do not have physical locations where customers may go to speak with a representative in person. You may do some transactions, such as cash deposits, at many post office offices using automated equipment. 

Several companies provide this feature, including Cashplus, Starling, and ThinkMoney. To see all the financial institutions that accept cash and cheque deposits via the Postal Service's network, visit their website.

Overdraft services are available with Monzo and Starling, but only after you apply for them and your credit is assessed.

Basic current accounts 📁

Basic accounts are the second best choice for those with weak credit who like old-fashioned banking and don't like the concept of trusting their phone with current account access.

Banks want overdraft clients (who they can earn money off of) thus they don't promote them too much. If you hunt for them, however, you should have no trouble locating them, and some financial institutions even provide them to customers who don't otherwise qualify for a conventional checking account.

Standard features including direct deposit, electronic bill pay, and debit card access are all available with basic current accounts as well.

The finest current account offerings, such as switching bonuses or interest on your balance, are often unavailable to you. While not ideal, a standard checking account will have to suffice. 

Check out these comparisons between basic bank accounts.

What’s the price?

Nothing! There is often no charge per month for digital and basic accounts. Some services, like using your debit card overseas, may still incur fees, but with many challenger banks, even those come at no extra cost.

There are other checking accounts designed specifically for persons with poor credit; these accounts often charge a monthly fee in exchange for additional security and tools that may help you get your finances managed. 

Even if you can't get past a conventional credit check, you still have options, and their special characteristics may come in handy in certain situations.

What to do and what not to do when banking with poor credit

Do

✔️ Open a checking account. This is the first step towards recovery.

✔️ Don't lose track of your finances. It's a good idea to keep track of your monthly expenditure, whether via real-time alerts on your phone or by checking your bill periodically.

✔️ Create a plan and don't stray from it. The budgeting tools available in mobile banking applications might be useful in this regard.

✔️ Be sure to keep tabs on your credit rating. The credit reporting companies have that info. You may start working on a solution after you identify the problem.

Don’t

❌ Get an overdraft. It's a costly method to borrow money even if your credit checks out. In addition, making payments won't improve your credit rating.

❌ Take out a larger loan. Especially if you have debts that still need to be repaid.

❌ Avoid paying bills. It will negatively impact your score.

Leading bank accounts for bad credit: The Verdict

There will be fewer banking options available to you if you have a low credit score. There are still many choices open to you, however. 

You can get a simple current account at several of the more established high street banks. In many ways, they are similar to standard checking accounts, with the exception that you likely won't have access to perks like an overdraft or switching incentives.

You may establish a complete checking account with several digital-only challenger banks using their mobile app with no need for a credit check.

As a result, although starting over or reestablishing your financial stability may be challenging, you can be confident that you will have access to at least the most fundamental banking services.

Simplest checking and savings accounts to open

Several financial institutions provide this service (as do the nine main banking organisations by law), but anecdotal evidence suggests that three institutions are especially glad to have clients with basic bank accounts and are more willing to go out of their way to assist them.

These accounts are preferable to credit cards since they don't need you to carry a balance and you can still keep track of your money. Santander's Basic Current Account, Co-op's Cashminder, and Virgin Money's M Account are the winners.

All three options provide you with a debit card that can be used at any ATM in the United Kingdom and enable you to set up direct debits and standing orders.

If you and another person meet the requirements, you may open all three accounts jointly. You may create a checking account with two of these companies entirely online. When you apply for any of the following accounts, the bank will conduct a credit check to verify your identification. 

However, Santander and the Co-operative Bank only do a “soft check”, meaning that no one but you will be able to see the result on your credit report.

Related Guides:

• Best Credit Cards for Bad Credit
• Best Credit Cards for Fair Credit
• Best Credit Cards to Build Credit