Oct 10, 2017

Many of us know what a credit score is – or at least have a general idea of what it is. You see commercials showcasing websites that offer free credit score reports every time you turn on the TV, and plenty of lenders advertise that they consider low credit scores.

So when you are applying for a new bank account and get turned down, it must have something to do with your credit score, right? Wrong! It probably has much more to do with your QualiFile score, which is an entirely different thing. Today we’re going to go over the differences between your credit and QualiFile score. We’re also going to give you some tips on how to boost that QualiFile score so that banks will be excited to have you as a customer.

Get to Know Your Credit Score

Those TV commercials are right; you should know your credit score! A credit score can help you secure a loan, buy a house, or get a great rate when you purchase your next car.

Without going into too much detail, a credit score is made up of several pieces of important financial information including your payment history, how much of your available credit you use, how long you have had credit for, and the different types of debt you have.

All of this data is formulated into a number ranging from 300 to 850, which is your credit score. A “good” credit score starts at around 670. But this score is not generally what prevents you from qualifying for a new bank account.

Your Qualifile Score

When reviewing your application for an account, many banks refer to a QualiFile score, a score completely different from a credit score that comes from a company called ChexSystems. Rather than considering just your loans and credit cards, the ChexSystems report looks at your banking history.

That one time in college when you over drafted your checking account and the bank closed the account? Yes, that’s going to be on there. What about that time when you bounced a few checks? Yes, that’s also on there. These items go toward a risk score that can range from 100 to 899 that tells a bank whether you are a potential risk. Depending on an individual bank’s tolerance for risk, it may accept applicants with QualiFile scores of anywhere between 525 and 580 and higher.

To find out what may have caused a bank turn you away, you can reach out to ChexSystems. For a small fee, they will provide you with a report that may help you understand what triggered the account denial.

What Do I Do Now?

The first step is to look over that report and pay off any debts that you still have with a bank. Avoiding debts will not make them go away.

If you find a debt, call that bank. Sometimes things get reported incorrectly. Call the bank on your report if you believe they made an error. They have the ability to call ChexSystems and have that error removed.

Look to establish yourself at another bank. Some banks, such as NetBank, consider themselves “second chance” banks. They look past small blemishes on your ChexSystems credit report and provide you with a bank account. A year or two of proving you are more responsible with your money could be exactly what your QualiFile score needs.

It’s not easy getting your finances back in order. Focus on one small item at a time and work to get your feet back under you. Knowing both your credit and your QualiFile scores can be a great first step to your future financial success.