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Home >> Manage Your Money >> Personal Finance
Opening New Account after Old One Closed
I was out of the country for five months, and while I was gone, my bank account was overdrawn $580. When I came back, my account had been closed for three months. I paid the bank back, but they told me that I couldn't open a new account for at least three years. Is this true? Is there any way that I can open an account sooner? If not what are my options?
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 You took care of the critical piece of business, paying the bank. Your old institution may have a policy of not opening or reopening a bank account for three years after it has experienced a charge-off, or when it gets a report that another bank charged off an account. However, there's no hard-and-fast rule that all banks follow. Some banks might reject requests for a shorter period; others might want you to wait longer.
Many banks send information on bank-closed accounts to credit reporting agencies, such as ChexSystems. These agencies provide reports to member banks that inquire on people asking to open accounts, much like a bank would inquire of a credit bureau if you were applying for a loan. This is how banks learn of other banks' negative experiences.
If you haven't done so already, ask your former bank for a written confirmation that you have repaid all that you owed them, and find out if they updated any earlier report they may have submitted to a credit reporting agency. They can provide you a telephone number to call if you want to confirm that your record shows that you've paid the overdraft amount.
When you ask to open an account with another bank, be prepared to give them a copy of the confirmation from the former bank. Also be ready to explain the circumstances, namely, your absence from the country, that led to the problem with your former bank. It may take a few tries, but you should be able to find a bank that will accept your business.
You may find a bank that will accept a savings account, but not a checking account, for a period of time. If you are able to manage your finances through a savings account for a while, that may be what you'll need to do.
Published on BankingQuestions.com 4/15/08
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