Great question. The short answer is it depends on each banks policy and how they enforce it. In NZ we are sometimes discriminated against in that we have no inherent right to a bank account if we are in default to another party. I have defaults listed against me on my credit report for credit card debt. I tried to open a bank account with SBS bank. They refused because I have defaults listed. They also wrote to me and stated they would be ensuring that their staff knows not to open bank accounts for people that are in default. When I first applied for a bank account they did actually open it before they had a copy of my credit report. They actually transacted against the account then closed it once they saw my credit report.
I did successfully open an account with Coop bank while a default was on my credit report. I first went to the manager of the bank and told him my story. They also do credit checks so they knew about my situation before they did the check.
I don’t know yet if all banks credit check you. My advice is to obtain a copy of your own credit report first. The banks will mostly use Veda because they are the only reporting agency that uses numbered credit scoring. Some banks will use the credit score to determine whether you can open an account or not. To know what your own credit score is you must pay $51.95 to Veda. But you can get a free report but it won’t have the score. But it will list your credit history. Which is what the banks want to know.
My advice is to get a copy of Veda’s free report. It takes a few weeks, or you could pay $10.00 and get it within a few days. Its valid for one month. Neither will contain the score. Then go and actually make a sit down meeting with the bank manager (not a personal banker or a customer services person). Show him your report and explain your situation. They may let you open the account. The bank may not need to credit check you. They all know that any enquiry is perceived negatively by the banking industry. The less enquiries you have lodged against you, the better. The entry of bad credit will stay on your report for five years. All enquiries also stay on the report for five years as well.
Also If a bank makes an enquiry only, I was of the impression that you do lose points against your credit score. Even if the account is only a savings or transactional account. I am now reviewing my data and conducting different research to answer that properly because that may not be the case. Whether you lose points or not when a bank does a credit check, an enquiry will still appear against the report regardless, assuming that bank subscribes to Veda.
The other two credit reporting companies don’t have credit score numbering systems.
That’s my advice. Others may have other experiences. That may contradict my experiences.
At the end of the day, it won’t do any harm to actually meet with the bank manager.
Because there is no consistancy in regards to opening a bank account when defaults are listed on a credit report, and there is discrimination, I make it a personal rule not to bank with a bank whose manager I haven’t met in person, or at least had a telephone conversation with.
My hope is one day the banks will accept all people as customers regardless of their past wrongs.