Why Was I Denied a Checking Account?
You can be denied a checking account for a lot of reasons, including a negative mark in your banking history, inability to verify your identity, or suspicions of fraud. These are only a handful of reasons; in reality, there are a lot more. If you are interested to know more about closing Bank of America account, then read on. Below, we have shed light on why banks might turn down your checking account application.
Top 8 Reasons Why Can’t I Open A Bank Account
Your Business Is Brand New
One of the major reasons why you might be rejected is that your business has only started, so you have no financial history yet. However, in a lot of cases, you are not rejected for being new. This rejection will tie into another reason – your business does not have proper documentation.
Moreover, many banks only deal with well-known companies. You will be unable to open accounts with them unless you are more notable. In a lot of cases, you must start with your local bank, i.e., Logix online banking. By doing so, you will help your business open an account, but it might be able to help you connect with an attorney to help you get all the documentation that you require.
Your Business Is Missing Documentation
This is one of the most common reasons why banks deny accounts, particularly if you apply online. If you do not have the required documents, the bank may not be able to verify essential information about your business. Thus, you will either be denied or will be put on hold until you provide the required information. It is best to contact an attorney to aid you during your business formation.
The Bank Can’t Verify Your Information
For the reason that blends into the first two items above, a bank might deny your new account if it cannot verify the information you provided. This might often be cleared in an instant, which will permit the bank to approve your account.
Your Business Or Business Owners Have Credit Issues
When opening a new Bank of America joint account, your bank might pull the company’s credit report to make sure that there are no credit issues. Moreover, the bank might pull personal credit report range on the business owners. This is particularly true if the business is too new you will have to improve credit score. While the bank might approve a business with issues on one of those credit reports, you might be denied. It is vital to keep a close eye on your business as well as personal credit reports. Moreover, you must also handle any problems to avoid being denied new accounts and potentially new lines of credit.
Your Business Appears In Check Verification Systems
Another reason why a bank denies a new account is for your business or one of your owners to show up in a “check verification systems report.” Services such as Early Warning Services (EWS), ChexSystems, and TeleCheck maintain business and consumer deposit account activity lists. If your business or one of your owners shows up on these lists, a bank might deny your new account. If this happens, you will be required to resolve the issue prior to applying for a new account, as nearly every bank uses a check verification system.
Your Type Of Business Is Not Supported
A number of businesses cannot get a business bank account at many banks. Such businesses might be involved in entirely legal activities but carry a risk that banks are unwilling to take. Federally-backed banks are banned from opening accounts for a few business types. Moreover, businesses performing illegal activities cannot get an account. While it is not a complete list, here are some major business types that are often denied a business bank account:
- Gambling-based businesses
- A business selling illegal products or performing illegal activities
- The sale of services and products that might be patently offensive
- Drug-related businesses, including medical marijuana and cannabis
- Selling firearms, weapons, or any related items that might cause injury
- The sale of vaping products, tobacco, or e-cigarettes
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Business Organization Might Not Be Supported
While many banks support many business organization types, some Chase student account, banks, or fintechs might not support every type of business. Many of them will not permit sole proprietors to open an account, while others might not permit multi-owner LLCs. Check the bank’s website to see which organization types are eligible to open an account. Moreover, some traditional banks may not let you open an online account based on your organization type. In those situations, you might have to pay a visit to the branch to open an account. Again, these banks will either contact you to let you know once you begin the process or include this information on their websites.
Business Transactions May Be Suspicious
If your business has a record of suspicious activities, you might be denied opening a new business bank account. Moreover, such activities might result in an existing account to be closed. Banks are required by the Office of the Comptroller of the Currency to fill out any suspicious activity reports (SAR).
Bottom Line
If you can steer clear of the reasons listed above as to why your ally joint checking account is denied, you should be able to open an account easily. If your account is rejected, it might be due to any reason. That reason can be as simple as verifying information with the bank or clearing up a small issue to turn that rejection into an approval. The bank should provide you with a clear reason for denial if you are turned down for an account. So, once you resolve these issues, you must be able to open your account successfully.