Bank Accounts With No Credit Check

A basic bank account is the straightforward answer to the question of whether you can get a bank account without passing a credit check. You do not have to pass one to be offered a basic bank account, though the bank will still use a credit reference agency to check your identity¹. These accounts are free to set up and use, and they work like any other bank account except that they come without a cheque book or an overdraft, so you cannot spend more than you have¹.

The accounts are deliberately plain. Basic bank accounts allow you to receive, store and withdraw money and pay bills, but they do not provide extras such as overdrafts, cashback, interest or other rewards². They are designed for people who may not be able to open a standard current account, for example because of a low credit score³. If you are bankrupt or have a poor credit rating, you may still be able to open one⁴.

If a basic bank account does not suit, there are two other routes that do not involve a credit check: a prepaid card, and an e-money account such as Suits Me. Each works differently, and the differences matter most when something goes wrong.

Basic bank accounts: no credit check needed

A basic bank account is a fee-free account with the core functions of a current account and none of the borrowing. You do not need to pass a credit check to get one⁵. The main advantage is that the account has no fees, and there is no opportunity for fees to arise from borrowing because borrowing is not offered⁷.

What you get is narrower than a standard current account. A basic account does not offer any credit facilities, such as an overdraft, but it does come with a debit card and standard banking facilities⁹. It will usually have fewer features than a current account, though you can still receive money, pay bills and take cash out⁸. The trade-off is deliberate: because there is no overdraft, there is no way to fall into overdraft debt through the account itself.

That does not mean the account is risk-free. You might be charged if a direct debit fails for lack of money, and not all basic bank accounts can be accessed at the Post Office¹⁰. If you are turned down for a standard account, you might be offered a basic bank account instead¹¹.

Basic bank accounts are not only for people with damaged credit. They are also used by people who simply want a simple account, and by people who have been refused a standard account for reasons connected to their credit file. If you are claiming Universal Credit and have been refused a bank account because of a bad credit rating, you could ask to open a basic bank account or see whether you can open an account with a credit union¹².

Prepaid cards as an alternative to a bank account

A prepaid card is not a credit card and not a bank account. When you buy something on a debit or prepayment card you are using money which is already in your bank account or loaded onto the card¹³. There is no need for a credit check to get one¹⁴. That makes a prepaid card one of the few payment methods open to someone who cannot open a standard account at all.

The practical appeal is control. Prepaid cards can often avoid ATM withdrawal charges and other bank card charges¹⁵. Because the card only ever holds what you have loaded onto it, there is no possibility of going overdrawn and no interest to pay.

The limits are just as real. A prepaid card account usually does not let you set up payments such as direct debits or standing orders, which rules out using one for bills that are collected automatically¹. It is a spending tool rather than a home for your money, and it will not accept your salary or benefits by bank transfer in the way an account with a sort code and account number would.

If you are considering a prepaid card for spending abroad, check what the card charges for use outside the UK before you load it, because the fee structure is set by the provider rather than by any common rule.

E-money accounts such as Suits Me

E-money accounts sit between a prepaid card and a bank account. Suits Me is one example in the UK, offered through credit unions as well as directly. Its selling point is speed and access: the provider states that you can open an account in minutes with no credit checks and get a Suits Me Mastercard with contactless functionality¹⁶. Several credit unions list the same feature, describing no credit checks at account opening¹⁷.

An e-money account typically gives you an account number and sort code, a card, and the ability to receive payments in, which a plain prepaid card often does not. That makes it usable for wages or benefits in a way a prepaid card is not. It is not a bank account, though, and the difference shows up in two places: there is no overdraft, and the protection is different.

The cost structure varies by provider. Credit union prepaid card schemes have been described as having no monthly or annual fees and low everyday fees²¹. Because these are commercial products rather than regulated current accounts, the fees are set by the provider and can change, so the terms you are given at opening are the ones that matter.

Basic account, prepaid card or e-money account: how each one works

The three options look similar from the outside and behave quite differently in use. The table below sets out what each one is for.

A basic bank account is the closest thing to a normal account. It has a sort code and account number, accepts payments in, supports Direct Debits, and comes with a debit card. What it lacks is any ability to borrow, which is exactly why it is available without a credit check.

A prepaid card is a spending tool. You load it, you spend it, and when the balance is gone you cannot spend more. It is useful for budgeting and for people who cannot open an account, but it is not a place to have your wages paid.

An e-money account is a hybrid. It behaves more like an account than a prepaid card does, with an account number and a card, but it is not a bank account and does not carry the same protection.

Hard and soft searches when you open an account

The type of credit search a bank runs matters more than most people realise. A soft search is used to check your identity and to help you find products you are eligible for, without impacting your credit score²². A basic bank account application uses a soft search of your credit file for identity checking only, and it does not affect your credit score⁵. Lloyds, for example, states that it will run a soft credit search to check your details, and that this will not impact your credit score or your ability to apply for credit in the future²³. Monzo describes the same process for its account opening²⁴, and Zopa says it only uses a soft credit search, so it will not affect your credit score²⁵.

A hard search is different. Banks often check your credit rating when you open a current account and can refuse an application based on credit history¹¹. Switching current accounts should not affect your credit score unless you switch several times in the same year, because some banks carry out a hard credit check when you open a current account²⁶. Even where a search does show on your file, the change does not affect your ability to get credit²⁷.

The practical point is that a basic bank account application is the low-risk option for your credit file. If you are applying for a standard current account instead, it is worth asking the bank which type of search it uses before you apply, because a hard search leaves a mark that other lenders can see.

Can a bank refuse me a basic bank account?

Yes, but only on specific grounds. A bank can refuse if you do not agree to a credit check, if you fail an identity check or an immigration check, if it suspects unlawful or fraudulent use, or if you have been threatening, abusive or violent towards staff¹. The bank should tell you why you have been turned down, unless it suspects you of fraud or money laundering¹.

There is also a legal duty in the other direction. Under the Payment Accounts Regulations, designated institutions must refuse to open a basic bank account for a consumer where it would be unlawful for them to do so²⁸. That covers situations such as sanctions and certain criminal convictions, rather than credit history.

If you are bankrupt or have a record of fraud, you will not usually be allowed to open a bank account at all⁴. A poor credit rating may lead to a refusal for a current account, but a basic bank account is usually still available⁴. If you have been refused, the options are to apply to a different provider, to ask about a credit union account, or to look at an e-money account.

What documents do I need to open a basic bank account?

You will need to show proof of who you are and where you live²⁹. Most banks ask for a driving licence or passport, or a photo of these if you are applying online, often alongside a selfie¹. If you do not have the usual documents, ask the bank what it will accept instead²⁹.

Banks can be flexible about alternatives. Documents that may be accepted include letters from the Department for Work and Pensions, HMRC, JobCentre Plus, your local council, a GP, a minister of religion, a social landlord, an armed services officer, a warden, a care home manager, an employer, a college or a training provider¹. To open a bank account you will need evidence of who you are, for example a passport or driving licence³⁰, and you will usually need ID such as a driving licence, passport, recent bills or official documents³¹.

If you are opening an account to receive Universal Credit, the same identity requirements apply, and the account needs to be one that can accept the payment. A basic bank account can. A prepaid card usually cannot, because it does not support the incoming bank transfers that benefit payments use.

Is my money protected in a prepaid card or e-money account?

This is the difference that catches people out. A basic bank account held with a bank or building society is covered by the Financial Services Compensation Scheme in the usual way. An e-money account is not. If your account is not a bank account, it is likely to be a virtual current account covered by e-money rules, which means your money is kept safe at a different bank, but you would need to make a claim to the administrator if your provider failed⁶.

That is a meaningful difference in a failure. With an FSCS-protected account, compensation is automatic up to the limit. With an e-money account, you are a creditor of the firm and have to claim through an insolvency process, which takes time and may not return everything.

There is a second protection gap worth knowing about. Your money is not protected unless you pay by credit card or Direct Debit³². Paying by credit card gives more protection for payments over £100³³. That matters if you are using a prepaid card or e-money account to buy something expensive, because a bank transfer out of an e-money account does not carry the same route to a refund if the seller fails to deliver.

If you are worried about a payment you have made, or about a firm that has stopped serving customers, free and impartial help is available from MoneyHelper, from Citizens Advice, and from the Financial Ombudsman Service if you have a complaint a firm has not resolved.