Unless you want to hide your money under the floorboards (and we certainly wouldn’t recommend this!), you’ll need to open some kind of account so that there’s a place for your income or benefits to be paid into and your regular bills to be paid out of. If you’ve not had the best credit history in the past (for example, if you’ve been issued with a CCJ), then you may find it difficult to be accepted for a traditional bank account – but what other options do you have?
What is a CCJ?
Before we get into the alternative accounts out there, let’s first make sure that you know what a CCJ is. If you owe money (which could include getting behind on bills like gas and electricity) but have trouble repaying and miss a number of payments then your lender can apply to the County Court asking for a judge to impose a CCJ (county court judgement) on you.
If this happens you’ll be made to repay what you owe, until the debt is paid off in full. If you can’t afford to pay your debts off all at once, then you may be able to pay in instalments. Falling behind with these could see you face extra charges.
How you could be affected
Even though it may seem like a lifetime ago since you were issued with a CCJ, a financial problem like this can affect your finances for years to come. In fact, any instance where you’ve had difficultly managing your money (including CCJs) will show up on your credit report for up to six years.
This can have an effect on your ability to be accepted for credit, so you may find that you have difficulty getting a credit card, loan or mortgage. You may also find it a struggle when it comes to securing a bank account, as traditional accounts will generally run a credit check on you.
These traditional accounts aren’t your only option though – you could go for a basic bank account instead. This is an account that is designed for people with poor credit scores. They offer a lot of the same features as a current account (such as a debit card) but they don’t generally offer an agreed overdraft facility or any interest when you’re in credit.
Whilst basic bank accounts don’t have a monthly fee, bear in mind though, this doesn’t mean you won’t face unexpected charges. For example, if you have a Direct Debit due to go out when there’s nothing left in your account you may be charged an unpaid transaction fee, and this could be anything up to £15.
thinkmoney Personal Account
Another option could be a budgeting account like thinkmoney’s. The thinkmoney Personal Account essentially works like any other traditional current account, but runs two accounts alongside each other. One (the Salaries Account) holds the money that you need for your regular commitments and the other (the Card Account) holds whatever’s leftover – so you’ll always have peace of mind that the important things are covered.
Unlike other basic bank accounts on the high street, we don’t do any credit checks on our applicants, so if you’ve had a CCJ or even been made bankrupt in the past, this won’t count against you. The account comes with a monthly management fee and as we don’t charge for late or missed payments, you’ll only have one payment a month.