Money Wellness
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category iconmanaging your money
calendar icon14 Mar 2024

Top bank accounts if you're in debt or have a bad credit score

If you’re in debt, or you’ve had financial difficulties in the past that have affected your credit score badly, you probably won’t qualify for a standard current account.

This doesn’t mean you can’t have a bank account- a basic bank account might suit you, or there are certain bank accounts out there that don’t do hard credit checks.

What is a basic bank account?

A basic bank account works like any bank or current account. The only things you can’t have with one is a cheque book or borrow money through an overdraft.

You can get payments like wages, benefits or a pension and pay for things and take out cash with a debit card.

You’ll be able to transfer money to pay bills or other people, including regular payments through direct debits and standing orders, as well as being able to manage your account using online bank and over the phone.

Why might I need a basic bank account?

Bad credit scores or being in debt may mean you don’t get offered standard current accounts through traditional banks. Instead, you may be offered a basic bank account if you have:

  • a bad credit history
  • an Individual Voluntary Agreement (IVA)
  • a Debt Management Plan (DMP) 
  • a Debt Relief Order (DRO)
  • been declared bankrupt

Best bank accounts if you have poor credit

While many banks are required to offer these accounts, we’ve rounded up some of the best bank accounts for those with bad credit or debts.

Not all of these are basic bank accounts, as they don’t all require a credit check.

Starling Bank- good for saving with no fees

The application process only does a soft credit check to verify your identity. It’s easy to set up, and they offer regular banking services alongside their saving space feature which will enable you to save money.

 There are also no hidden costs while using it overseas, and it’s able to connect to Apple Wallet and Google Pay. There aren’t any recurring costs with Starling, and any interest accrued is paid into your account monthly. Loans and overdrafts are also offered.

ThinkMoney- great for budgeting and improving your credit score

 ThinkMoney doesn’t require any credit checks to open an account. It’s easy to set up, and you should get your debit card in three to five business days once accepted.

 The bank pride themselves on helping people improve their credit rating and helping their customers to budget, with a smart budgeting feature that can set aside money for your bills, leaving the rest of your income to you. With these guaranteed on-time bill payments, it’ll boost your credit score.

 There’s a monthly fee of £10.95.

Co-op Cashminder- available as a joint account

 This basic bank account only does a soft credit check which won’t show up on your credit file. It can be managed through both online and mobile banking, and your debit card will work with Apple Wallet and Google Pay.

 If you’re looking for an account to open with your partner, but you're worried about debts or credit score, Cashminder is also available as a joint bank account.

There are no monthly fees, but you will be charged for things like using your debit card abroad and sending money overseas.

Monzo- don't need proof of residence to apply

 Monzo only do a soft credit check to see whether you qualify. It’s simple to use and you can pay across many accounts for spending, saving, and paying bills.You won’t  have to pay any fees to make international transactions.

Loans and overdrafts are offered. There are two paid accounts, and one that's free.

To apply, you don’t have supply proof of residence, which could be a major perk. Instead, you just need to provide a selfie video and a form of ID.

Santander Basic Current Account- good if you’re new to the UK

This account is specifically designed if you have a poor credit history, or if you’re new to the UK. With no monthly fees, they only do a soft credit check.

As well as offering your usual  banking services and access to both online and mobile banking, you can also get cashback and offers through the Santander Boosts rewards program. Plus you can also get  travel benefits such as fee-free use of Santander ATMs when you travel abroad.

Cashplus ActivePlus- good for building up credit

Cashplus is very simple to set up. By applying through your phone, it doesn’t do a credit check. They’re renowned for their smartphone technology and because of this it’s simple to use.

There’s an optional add-on to your account called the Creditbuilder, which is great to improve your credit history, and you can get free withdrawals in the UK and abroad.

They do offer overdrafts, and there is a fee starting at £5.95 per month.

Can’t open an account?

Don’t fret. If you’re still struggling to open an account, there are other options to consider:  

Credit Union current accounts

Credit unions are run by not-for-profit organisations, but you might pay a monthly fee to get one.

You usually won’t have to pass a credit check, even if you apply for an overdraft, because they normally use manual checks to decide whether to lend to you. 

Credit unions work by all members sharing a ‘common bond’, such as living, working studying or volunteering in a certain area, or belonging to the same trade union.

Their bank accounts work like a current account from a bank or building society, but they may charge for certain features like a debit card, setting up standing orders, or access to overdrafts.

But free you should be able to:

  • pay in or take out cash at the credit union
  • have money paid in, such as wages, benefits and pensions 
  • use online, mobile or telephone banking 
  • get budgeting advice and support.

Find a credit union to join:

Prepaid Cards

Prepaid card accounts let you spend and withdraw cash but you can’t usually set up payments.

You can only spend the money you put on it, so there’s no risk of going overdrawn or running up a debt. 

Plus, your payments won’t be recorded on your credit report, and how you use the card will not affect your credit score.

It works like a pay-as-you-go mobile phone because you top it up with money in advance. You can use it like any other payment card, in shops or online and even at ATMs.

But the difference is that these cards aren’t linked to bank accounts. You can still have your wages or benefits directly sent to them, or load cash onto them at reload locations.

Find your pre-paid card:

Make sure to do your research into finding the best prepaid cards that work for you: you use more than one as they don’t all have the same deals.

Need debt help?

If you’re currently struggling with your debts, and don’t know what to do about it, we can help. You’re not alone, and there is help available to you. All our debt advice is free and impartial.

Our free debt advice is available to people all over the UK, online or over the phone. We’ll go through your finances in detail and explain your options. You might be surprised at the range of help available. We can:

  • check you’re getting all the benefits you’re entitled to
  • help you with budgeting
  • advise you on debt solutions

 There are various debt solutions available that reduce your monthly debt repayments and even write off some of your debt. We’ll let you know if any of them are suitable for you. All our advice is free. Some debt solutions are free, while others come with a fee. We’ll give you all the information you need to make an informed decision and, if we recommend a debt solution and you decide to go ahead, we’ll help get it set up.



Avatar of Lydia Bell-Jones

Lydia Bell-Jones

With a background in banking, Lydia has been writing professionally for over five years. She is passionate about helping people improve their personal finances and has a particular interest in the connection between money and mental health.

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