High street banks are not the only option if you need a bank account that can be opened with poor credit. You could also try a credit union.
Credit Unions are best-known for offering low interest loans, but some — including London Mutual Credit Union, Darlington Credit Union, and Central Liverpool Credit Union — also offer current accounts called Engage accounts. These are accounts that anyone can open, irrespective of their credit history, but please note these are not the same as bank accounts.
Engage accounts offer similar benefits to a basic bank account: you can send and receive money, manage regular payments, and pay bills. You’ll also get a debit card, but this must be pre-loaded with money before use.
It is important to note that Engage is an electronic money product and not a bank account and although it is a product regulated by the Financial Conduct Authority, it is not covered by the Financial Services Compensation Scheme (FSCS).
To open an Engage account, you’ll need to join a credit union and pay £2 a month in account management fees.
As these are not bank accounts any money held on an Engage card is not covered by the Financial Services Compensation Scheme (FSCS).
If you would sooner try your chances with a standard current account first, rather than plump for a basic bank account or Credit Union, it might be worth heading to a digital or online-only bank such as Starling or Monzo.
These banks only tend to carry out a ‘soft’ credit check, which will not be visible to other lenders. So if you are turned down, there’s no harm done.
