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Best Bank Accounts for Bad Credit

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According to a 2017 report by the FDIC 6.5% of Americans–or 8.4 million people are “unbanked.” That means they have no bank relationship whatsoever. An additional 18.7% are considered “underbanked,” which means they have only limited bank relationships, and rely on prepaid debit cards, check cashing services, and even payday loans.

There’s a little doubt millions of people are in that situation because they have bad credit. Particularly with checking accounts, banks are reluctant to open them for people with impaired credit. If you fall into that category, and you don’t have a bank account, we’ve compiled a list of bank accounts for bad credit.

Related: 4 Options When You Can’t Open a Bank Account

At least one of them should provide the checking account services you need to transact business freely.

Overview of bank accounts for bad credit:

Bank Account Unique Features Fees Best For…
Wells Fargo Opportunity Checking “My Spending Report with Budget Watch” for better financial management, plus a savings account $10 per month, but waived with $500 direct deposits, $1,500 min. average balance, or 10+ debit card transactions Full service checking account features and benefits
GoBank Checking “Budget & Fortune Teller” helps you manage your finances, plus a savings account $8.95 per month, waived with $500 or more in monthly direct deposits Large ATM network
Radius Bank Essential Checking “Financial Dashboard” enables you to track and analyze your activity, as well as link external accounts $9.00 per month, with no provision for waiver Managing your entire financial life on one app
BBVA Compass Bank Easy Checking Upgrade to a standard account after just 12 months $13.95 per month, with no provision for waiver Upgrading to a standard account quickly
NetBank Second Chance Checking Make cash deposits at thousands of participating retailers $6.95 per month with direct deposit, otherwise $8.95 Attractive trade-up checking accounts

Best Bank Accounts for Bad Credit

Wells Fargo Opportunity Checking – Best for Full Service Checking Features and Benefits

As one of the biggest banks in the country, Wells Fargo is available in most states. There’s also the advantage of having a checking account with such a well-known bank, especially when you have bad credit. They offer their Opportunity Checking account for customers who are unable to open a standard account due either to past credit problems or an unsatisfactory banking history.

Features

Opportunity Checking comes with a wide variety of features and benefits, making the account comparable to an account for someone with good credit.

Those features include:

  • Minimum initial deposit of $25
  • Online banking with Bill Pay
  • Mobile banking, with mobile alerts warning you of suspicious activity, low balances, and payment due dates
  • Platinum debit card, with Zero Liability Protection against unauthorized charges
  • Access to over 13,000 ATMs and 5,700 bank branches
  • You can open an Opportunity Savings account to provide overdraft protection

One of the more interesting features offered on the checking account is the My Spending Report with Budget Watch that’s made to order for anyone with bad credit. It enables you to track your spending, which will give you greater control over it. That can help you avoid some of the situations that contribute to bad credit.

Fees

Opportunity Checking Comes with a monthly service fee of $10. However, you can avoid the fee with one of the following in each service period:

  • Maintain a minimum daily balance of $1,500
  • Have one or more qualifying direct deposits totaling at least $500
  • Have 10 or more posted debit card purchases or payments

Other significant fees include $35 for overdraft and returned items, $2.50 per withdrawal at non-Wells Fargo ATMs, and $31 for a stop payment.

Pros:

  • The minimum initial deposit required is very reasonable at just $25
  • The monthly service fee can be waived with one of three options
  • Both online and mobile banking are included
  • The My Spending Report with Budget Watch can help you better manage your finances
  • You can set up a savings account to provide overdraft protection

Cons:

  • Wells Fargo isn’t available in all states
  • The monthly service fee applies if you can’t meet one of the three criteria to have it waived
  • There’s a 3% international debit card purchase transaction fee

Bottom Line

The Wells Fargo Opportunity Checking account gives customers with bad credit histories all the typical features and benefits associated with a standard checking account. The My Spending Report with Budget Watch can help you get better control of your finances, while the addition of an Opportunity Savings account can enable you to begin saving money, so you’ll rely less on credit. Overall, it’s an excellent package for a person with bad credit to begin rebuilding.

Related: The Best Credit Cards for Poor Credit

GoBank Online Checking – Best for Large ATM Network

GoBank Online Checking is an online checking account provided by Green Dot Bank. It’s an online bank, so there are no brick-and-mortar branches. But it’s one of the very best accounts for bad credit, since your application won’t be denied for either bad credit or negative bank information revealed through ChexSystems. The account provides everything you’ll need in a checking account. And even though it’s an online bank, the funds in your account are fully FDIC insured.

Features

GoBank Online Checking comes with all the services you’d expect from a checking account. Those features include:

  • Minimum initial deposit of $0 online, or $20 with a GoBank starter kit
  • Online banking with Bill Pay
  • Mobile banking, with mobile check deposits and account alerts
  • Debit MasterCard or Visa Debit Card, with Zero Liability Protection against unauthorized charges
  • Send and receive money to individuals with either a GoBank account or PayPal
  • Paper checks are available, which is unusual with online banks
  • Access to over 42,000 in-network ATMs
  • Deposit cash into your account at more than 100,000 retailers
  • You can open a Money Vault savings account

An interesting feature is the Budget & Fortune Teller app. It enables you to set up a budget to track both your income and expenses. It even allows you to set up budget reminders, while the Fortune Teller feature gives you guidance based on your budget.

Related10 Online Budget Tools

Fees

GoBank Online Checking has a monthly fee of $8.95. But it can be waived with direct deposits of at least $500 per month, from either payroll or government benefits.

There are no fees for either overdraft or non-sufficient funds (NSFs). However, there is a 3% foreign transaction fee, as well as $2.50 to use a non-network ATM. Also, if you deposit cash through a retailer, there is a fee of up to $4.95 per deposit.

Pros:

  • Access to a huge ATM network, as well as the ability to deposit cash through more than 100,000 retailers
  • Account comes with paper checks, which is not typical for online only bank accounts
  • No overdraft or penalty fees for NSFs
  • The Budget & Fortune Teller can help you better manage your finances
  • A savings account feature is offered

Cons:

  • No bank branches
  • ATM withdrawal limit is $500 per day
  • Personal check deposits are limited to $500, or $1,000 per day
  • Joint accounts aren’t offered
  • 3% foreign transaction fee
  • There’s a fee of up to $4.95 per deposit if deposit is made through a retailer

Bottom Line

GoBank Checking provides all the features of a full service checking account even for those with bad credit. It’s also critical that they don’t check your previous banking history. The biggest reason people are declined for bank accounts is because of unsatisfactory banking relationships in the past. The Budget & Fortune Teller will help you to better manage your finances, while the savings account feature will enable you to begin building a financial cushion.

Radius Bank Essential Checking – Best for Managing Your Entire Financial Life

Radius Bank Essential Checking is designed for customers who don’t have a perfect banking record. Not only does it offer a full service checking account, but it also helps you to manage your money using powerful technology.

Features

Radius Bank Essential Checking comes with the following features:

  • Minimum initial deposit, $10
  • Online banking with Bill Pay
  • Mobile banking with mobile check deposits
  • Comes with paper checks
  • Daily debit card limit of $500
  • Pay family and friends with Venmo
  • Add Apple Pay, Google Pay and Samsung Pay to your debit card
  • After 12 months of positive banking history, you may be eligible to upgrade to a Rewards Checking account

The Financial Dashboard feature enables you to 1) build a budget and track spending, 2) analyze trends, 3) link external accounts, and 4) monitor your net worth.

Fees

The account has a $9 monthly service charge and does not offer a waiver provision.

Pros:

  • Offers paper checks, which is uncommon for online banks
  • Mobile Wallet for your debit card – Apple Pay, Google Pay and Samsung Pay
  • Financial Dashboard enables you to link and monitor external accounts
  • Upgrade to Rewards Checking after only 12 months

Cons:

  • No bank branches
  • No monthly service fee waiver provided

Bottom Line

The Radius Bank Essential Checking Financial Dashboard enables you to manage your entire financial life on the banking app. That will help you get better control of your finances, which should help to improve your credit. You can also trade up to Rewards Checking after just 12 months.

Related: How To Get Your REAL Credit Score

BBVA Compass Bank Easy Checking – Best for Trading up to a Standard Account Quickly

BBVA Compass Bank Easy Checking is designed for specifically for consumers who are unable to open a standard account. They recommend you first apply for the standard Free Checking account, and you’ll be offered Easy Checking if you don’t qualify.

Features

BBVA Compass Bank Easy Checking comes with the following features:

  • $25 to open your account
  • Online banking with Bill Pay
  • Mobile banking with mobile check deposits
  • Visa Debit Card, with cash back rewards on select purchases
  • Unlimited check writing

Perhaps the biggest feature of the BBVA Compass Bank Easy Checking Account is that it comes with an opportunity to upgrade to a standard checking account after just 12 months. To qualify for the upgrade, your Easy Checking account must still be in active status, and have a positive balance. And though they don’t say it, you probably shouldn’t have any overdrafts in your account.

Fees

The account comes with a monthly service charge of $13.95. Unfortunately, there’s no provision for the fee to be waived.

BBVA Compass Bank Easy Checking also has the following fees:

  • NSFs – $32
  • Deposited item returned – $15
  • Out of network ATM fee – $3 plus fee charged by hosting institution
  • 3% international transaction fee
  • Early account closure fee – $25 if closed within 180 days of opening

Pros:

  • Unlimited check writing
  • Availability of savings accounts to avoid overdrafts
  • Cash back rewards on select Visa Debit Card purchases

Cons:

  • High monthly service fee
  • No monthly service fee waiver provision
  • Easy Checking is available in only seven states: Alabama, Arizona, California, Colorado, Florida, New Mexico, in Texas
  • 3% international transaction fee

Bottom Line

Despite the relatively high fees on this account, it’s well worth having since it gives you an option to trade up to a standard account after just 12 months.

NetBank – Best for Attractive Trade-up Checking Accounts

Offered by Axos Bank, NetBank Second Chance Checking is specifically for people who are in the ChexSystem and unable to open a regular checking account.

Features

As the name implies, NetBank is a fully online banking platform, and therefore has no local branches. However, it does offer full service checking with the following features:

  • Minimum opening deposit of $50
  • Free Visa Debit Card
  • Overdraft protection available
  • Online Banking with Online Bill Pay
  • Mobile Banking with mobile check deposits
  • Deposit cash with Green Dot Reload at participating retailers
  • Account monitored for potential fraud

One of the major benefits of NetBank Second Chance Checking is that once you improve your credit and establish your banking relationship, the bank has a number of excellent checking account options. For example, their Rewards Checking pays interest up to 1.25% APY, while their CashBack Checking pays you 1% cash back on all transactions that require a signature. And neither account has a monthly service fee.

Fees

The monthly service fee is $6.95 with direct deposit. If you don’t have direct deposit, the fee increases to $8.95 per month.

Pros:

  • Ability to add cash to your account through participating retailers
  • Excellent checking account options when you improve your credit

Cons:

  • No local bank branches
  • $4.95 fee to reload your account at Green Dot Reload retailers
  • No paper checks

Bottom Line

NetBank Second Chance Checking is an excellent bank account for bad credit, especially since they don’t even check the ChexSystem. And once you build a solid relationship with the bank, and improve your credit a bit, you can trade up to other checking accounts that have both serious benefits and low fees.

What is a Bank Account for Bad Credit?

It’s an account for anyone who can’t qualify for a standard bank account. This can certainly include anyone who has bad credit, particularly if there’s a major derogatory event, such as a bankruptcy.

But an even bigger problem is a history of one or more unsatisfactory banking relationships. Several times in this review I’ve mentioned a service called ChexSystems, which is something like a credit reporting database for banks. The main difference is that it reports specific activity connected to previous bank accounts. For example, it keeps track of bank customers with a long history of bounced checks, or who have accounts that have been closed with unpaid negative balances.

Banks will access ChexSystems before opening any new accounts. If you have negative information in your report, you will not be permitted to open a standard account. Should that be the case, bank accounts for bad credit will be your only option.

Why You Need a Bank Account for Bad Credit

In a world where money has gone full-on electronic, you need to have a bank relationship. It will make it easier to pay bills, deposit checks, accept payments of all types, transact business with online and point-of-sale businesses, and access cash.

What’s more, having a bank account is much cheaper than using alternative financial services. For example, common non-bank financial services include:

  • Prepaid cards, which have high fees and limited usability
  • Money orders, which have high fees and aren’t accepted everywhere
  • Check cashing services, which are the most expensive option for managing your income

Simply having a bank checking account can save you hundreds of dollars per year over these services, as well as enable you to transact business freely.

Improve Your Credit Score

You can take some steps to improve your score. Paying your bills on time, keeping credit card balances low, and leaving older accounts open will help raise your score.

Ready to increase your score now? Experian Boost™ can help raise your FICO score with every utility and mobile phone bill you pay on time. Until now, those payments did not positively impact your score. Start now for free.

Read More: Experian Boost Review

Bottom Line

If you’ve been going without a bank account because you have bad credit, you now know you have alternatives. Even if you can’t qualify for a standard bank account, bank accounts for bad credit offer most of the same services.

Choosing any one of the above bank accounts will not only make your financial life easier, but it will also save you money in the process.

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Inside the Highly Profitable and Secretive World of Payday Lenders

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Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



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What’s Questionable Credit and Can I Get a Car Loan With It?

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Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Bad Credit

Entrepreneur Tae Lee Finds Her Fortune

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By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email tae@taelee.money; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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