Bad Credit Business Banking

Can I Open a Business Bank Account with Bad Credit?

Even if you have a poor credit history you should be able to open a business bank account. However, the process of opening a business bank account may prove to be more difficult.

There are some banking providers who offer business bank accounts to people with a bad credit history and sometimes do not even conduct a credit check at all.

Read on to learn all about opening a business bank account with bad credit, as we walk you through all the important information necessary to help you on your journey.

Can I improve my credit score?

There are certain measures you can take to improve your credit score, e.g., by:

• Making sure that you are registered on the electoral roll
• Checking your credit report to ensure there are no mistakes
• Paying back any credit you owe on time
• Paying back as much as you can on any open loans or credit cards
• Not making too many credit applications at one time
• Not applying for credit immediately after being rejected

Opening a business bank account without a credit check

If however you are not in the position to improve your credit score, some providers, e.g., Cashplus and CardOneMoney, allow you to open a business bank account without conducting a credit check on you first.

Although the process is usually a quick one, it is important to remember that business accounts that focus on banking customers who have a poor credit history, tend to charge higher fees than some of the other business accounts on the market.

Pros of a business bank account for bad credit

Here are some advantages of having a business bank account for bad credit:

• No credit checks: as mentioned, this allows you to bypass a credit history check.
• FSCS protection: there are providers who offer protection up to £85,000, but your business may need to meet certain criteria first.
• Digital invoices: some providers offer this, which allows you to keep more accurate payment records, which in turn can help improve your credit score over time.
• Quick set-up: setting up a business bank account for bad credit is usually a quick process.

Cons of a business bank account for bad credit

There are, however, a few disadvantages:

• Higher fees: operating such a bank account may result in higher fees and traditional banks usually don’t offer such an account in the first place. And when they do, it is hard to secure.
• No overdrafts: unlike traditional business bank accounts, a business bank account for bad credit does not come with this facility.
• No interest: similar to no overdrafts, this is not usually offered on in-credit account balances.

Is it free to open a business bank account with no credit?

It is possible to open a business bank account with a bad credit history. Although this may not necessarily be as easy as opening a business bank account with a good credit history.

Costs of business bank accounts with no credit checks can vary quite a lot, with some being completely free and others offering only a free trial period. Generally, though, you will find some kind of fees attached to the use of the account, e.g., fees for:

• Cash withdrawals
• Direct debit payments
• Foreign transactions
• Admin and sending letters

You should always compare the account features and fees to find the best bank suited to your business needs, and look carefully at their application requirements.