Best Bad Credit Banks

When searching for a bad credit bank account you will no doubt be looking for the one that offers the best options for you. For example, some people want a bank account so that they can they can make payment by direct debit for gas and electricity bills, and mobile phone contracts. Others may want to make purchases online or need to take cash out after bank closing times. As such they require a debit card or a prepaid credit card. Here we have compiled a list of what we think are the top 5 bad credit banks.

best bad credit banks

Types of Accounts
When looking for a basic bank account there are a number of things that you should watch out for when applying. For example, there tend to be two types of account; managed and un-managed. A managed bank account will mean that you will be given a dedicated money manager that will help you with any financial problems as well as the chance to improve your credit rating. The downside of these accounts is that you do have to pay a monthly fee of around £10-£15. The other option, an un-managed account, is exactly that. It is as basic as you can get, simply a place to put your wages and pay your bills.

Why is it so hard to get an account with bad credit?
If a customer has very bad credit, banks consider them to be very high risk as their record indicates they don’t handle their finances well. Our guess is that the only reason they do offer basic bank accounts is because they think the government will most likely make them if they don’t. It is highly possible that the banks themselves don’t make any money on basic accounts. As such, it is important to note that everyone is entitled to a basic bank account. Another point to mention is that many, if not most banks will charge a monthly fee for a basic bank account and some may charge an initial set-up fee. Monthly fees are usually between £10-£15 and the set-up fee tends to be around £30.

For more information on UK bank accounts that offer basic accounts for people with a poor credit rating, check out They have a comprehensive guide of all UK banks that offer this service so that you can choose the one that suits you best.

Why some banks like bad credit
It may seem like a strange concept, but if you think about it, it kind of makes sense. A bank is a business and so it’s main aim is to make a profit. A customer who has a low credit score, whilst being slightly risky, can be very profitable. Usually they are people who borrow often and miss payments occasionally but eventually do pay back what they borrowed. This means they pay a lot of interest which is a big plus to the bank.

Similarly, you may find yourself getting refused even if you have a good credit score. This is for the exact opposite reason; you may not be a very profitable customer because when you do borrow, you pay on-time every time! Whilst this is not a negative thing, some banks may be put off by the lack of return.

Managing Your Bank Account
Once you’ve been approved you will be pleased to know that you can manage you finances online, over the phone or by going into your local branch. This allows you complete control over your account and makes it easier to keep track of what your spending. It also means you can set direct debits up online rather than having to go into the bank. You will also be assigned an account manager that can help you with any problems you may be having with your account.