Month: May 2021

How Shopping Small Makes a Big Impact in Your Community

Posted on by Kelsey Sheehy

I get it. It’s easy to shop on Amazon. Running low on toilet paper? Need lightbulbs? Want a bath caddy on a whim? With two clicks and even less thought, the item you need/want/desire is at your doorstep, often in 48 hours or less.

Shopping locally requires more thought. Supporting small businesses is an intentional act — one that the mom and pop shops in your neighborhood desperately need you to make.

Tens of thousands of small businesses closed over the past year, many of them permanently. Each closure leaves a void that goes deeper than an empty storefront. The community loses dollars, jobs and resources that now-shuttered business would have circulated back into the local economy.

Small businesses reinvest

According to the U.S. Small Business Administration, when you spend $100 at a small business, $48 stays in the community. Spend the same $100 at a big-box store or national retailer and only $14 stays.

Why? Because local businesses rely on other local businesses.

Kela Nabors is the founder and CEO of Organically Bath & Beauty, an organic vegan skincare line and shop in San Antonio. She uses a local firm for marketing and financial services whenever she can. The cards she puts in each gift set come from another local business: Belle & Union.

“We keep it local as much as possible,” says Nabors, who also partners with and supports a local food bank and frequents other small businesses for her personal shopping.

If her business went under, which it nearly did last year, the loss would ripple through the community. But Nabor’s customers came through, buying products and promoting her store.

“Some people were buying something every day to send to people they knew,” Nabors says. “It really helped create new relationships with people outside of our core (customer) base.”

Turning the lights on

Local support is the only thing keeping the lights on for many businesses. In some cases, it’s turning the lights back on.

Some small businesses that had to close earlier in the pandemic have been able to reopen, in large part because of customer support, according to a January 2021 report from Facebook and the Small Business Roundtable, a coalition of organizations that advocate for businesses and entrepreneurs.

According to the report, 25% of small businesses were closed in December 2020, an improvement from 31% in April 2020. Among those that closed and later reopened, 31% say customer support is the reason they were able to do so. Businesses also cited social distancing measures (40%) and loosened restrictions (30%) as factors that allowed them to reopen.

Nabors had to close her storefront early in the pandemic when sales plummeted from around $15,000 per month to just $500 in March.

“I thought, ‘We can’t make rent like this.’ So we moved everything back into our home,” Nabors says.

Customers kept reaching out, asking Nabors to add products to her website and encouraging her to do more outreach on social media. Her online sales grew from around 10 per month to 50 to 100 per day. She reopened her storefront in May and is now looking to expand.

“We were able to actually thrive and grow during the pandemic,” she says.

Local shops hire locally

Businesses need to staff up as they reopen and gradually bring operations back to pre-pandemic levels. That hiring is going to happen locally, says Tom Sullivan, vice president of small-business policy at the U.S. Chamber of Commerce.

“Small businesses have a unique advantage when it comes to hiring: a network of community that is different than Indeed or LinkedIn,” Sullivan says. “We’re going to see more of an emphasis on local hiring than we have ever seen before.”

Nabors is already looking to hire. Her business went from three employees pre-pandemic (two of whom have since relocated) to one employee and a handful of family members in the early months of the pandemic. Now, she has five employees, is shopping for warehouse space and plans to hire 22 new employees.

A rising tide

There’s a saying: a rising tide lifts all boats. It means everyone benefits from a good economy. This happens on a micro level, too.

When a town or neighborhood has a healthy small-business district, property values rise and housing demand increases, says Matt Wagner, chief program officer at the National Main Street Center Inc., a nonprofit organization that works to revitalize historic commercial districts.

Other small-business owners notice, too.

“You get a bandwagon effect, with more entrepreneurs wanting to enter the market,” Wagner says. “A lot of it has to do with having small businesses there, whether it’s a brewery, coffee shop or grocery store. It becomes a neighborhood.”

Small-business districts become a point of pride, a place to show off to friends and family when they visit.

“It’s become an amenity in some ways. It’s like having a robust school system or parks and trails system,” Wagner says. “People may have taken it for granted before, but we see now that it could be gone and that does a lot to your personal quality of life.”

Kelsey Sheehy writes for NerdWallet. Email: ksheehy@nerdwallet.com.

The article How Shopping Small Makes a Big Impact in Your Community originally appeared on NerdWallet.

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How You Can Recover From a Bounced Check

Posted on by Chanelle Bessette

Bounced checks happen. Maybe you got an unexpected delay in receiving your paycheck before you mailed out your rent payment. Or maybe you forgot that you sent a check for your niece’s birthday and double-dipped that same cash on another check to the electric company.

Here’s how you can recover from sending a bounced check and how to prevent bounced checks in the future.

Steps to take when your check bounces

  1. Reach out to the person, business or organization that tried to cash your check. Whether your recipient was a friend, family member, roommate, landlord, utility company or anyone else that you want to pay, you should reach out to them as soon as you know your check bounced or is in danger of bouncing. This early communication should help mend any confusion or ill feelings that may arise, and you can get to work paying what you owe.
  2. Cover the bounced payment amount. Perhaps your bounced check was an accident and you just need to move a bit of money around. If that’s the case, try to cover your payment as soon as possible.

If you don’t have the funds on hand, then talk to the recipient about the circumstances of your financial hardship. They might be able to help you by setting up a payment plan to cover your payment in installments.

  1. Ask your bank if it can forgive your overdraft fee. If this is your first time bouncing a check, your bank might be more lenient about forgiving your nonsufficient funds or overdraft fee. If this has been a pattern of behavior, however, then your bank might become more stringent about requiring that you pay your overdraft or nonsufficient funds fee.
  2. Pay your fee if it can’t be forgiven. If your bank isn’t budging on your returned check, nonsufficient funds or overdraft fee, then you may have to pay it in order to remain in good standing with your bank. Consider shopping around for a new bank with a lower overdraft fee.

Potential consequences of a bounced check

Repercussions for bouncing a check range from mild annoyances to civil or criminal action. Here are some of the potential outcomes when you bounce a check.

You may be charged a returned check fee, nonsufficient funds fee or overdraft fee. These fees are common at most banks. They can usually be upward of $30 or more per overdraft, and some banks charge this fee multiple times per day or charge you for having a continuous negative balance. Familiarize yourself with your bank’s overdraft policies so that you can know what you’re on the hook for in case of a bounced check or overdraft, as well as how you can avoid overdraft fees in the future.

You may deal with personal or professional fallout. Depending on your relationship with your check’s recipient, you may face some frustration or grudges as the result of a bounced check, which is why it’s important to let your recipient know the situation as soon as possible.

Your bank may report you to ChexSystems. ChexSystems is a reporting service that banks use to alert one another about customers who might not be responsible with their accounts, such as an ongoing issue with a customer not paying overdraft fees. It’s possible to clear your ChexSystems record, but a negative mark can stay on your record for up to five years.

You could face criminal or civil penalties. Depending on where you live, how much the check was for and whether you knowingly gave someone a bad check, you may be subject to federal or state criminal laws regarding bounced checks, some of which could even result in a felony charge. On a less extreme level, the recipient of the bounced check may try to sue you in civil court if the payment issue remains unresolved.

Tips to avoid bouncing a check in the future

Whether you made a one-time mistake or have a habit of bouncing checks, you’ll find that there are steps you can take to avoid bouncing checks in the future.

Sign up for overdraft protection, if available. Overdraft protection is a service that many banks offer that allows you to transfer money from a linked bank account to cover an overdraft. Some banks charge for this service while others provide it for free. If overdraft protection transfers aren’t available, your bank may have an overdraft line of credit, which is basically a way to borrow money to cover an overdraft. However, overdraft lines of credit can charge high interest rates, so make sure you use one only if you know you can pay it back quickly.

Consider sending a money order instead. If you get a money order from your bank, the bank will likely withdraw the funds from your account immediately, so you don’t have to worry about accidentally spending the money that’s supposed to go toward a check. Some bank accounts offer these services for free while others charge for them, and sometimes there are funding limits to how much you can put on a money order at once. Check with your bank to see if this option is available to you.

Use a payment app instead of a check. If you’re looking for a more immediate and convenient way to send money — as opposed to writing and mailing a check, then waiting for it to clear — consider looking into payment apps instead. Apps like Zelle, Venmo and Cash App allow you to send money quickly and without the hassle and delay of sending a check.

Chanelle Bessette writes for NerdWallet. Email: cbessette@nerdwallet.com.

The article How You Can Recover From a Bounced Check originally appeared on NerdWallet.

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You May Qualify for Free or Cheaper Health Insurance Now

Posted on by Liz Weston

The latest coronavirus relief package did more than dole out $1,400 checks. The law also made health insurance free for millions more people and reduced costs for others, at least for now.

The American Rescue Plan, which President Joe Biden signed in March, expanded subsidies for people buying their own insurance on Affordable Care Act exchanges. In addition, anyone who receives unemployment benefits this year can qualify for zero-premium health insurance through the exchanges, regardless of income.

In fact, many people who are currently uninsured will qualify for free or low-cost coverage through the exchanges or Medicaid, says Daniel McDermott, a policy analyst with KFF, the nonpartisan health care think tank formerly known as the Kaiser Family Foundation.

People who lost their jobs but want to keep their former employer’s health insurance also may get help. If you don’t qualify for group health insurance elsewhere, the federal government will pay your COBRA premiums for up to six months.

Millions qualify for free ACA coverage

Since 2013, ACA exchanges have allowed people to buy individual and family health insurance policies, usually with tax credits that reduced their premiums and other costs. ACA has four levels: bronze, silver, gold and platinum. Bronze plans typically have the lowest monthly premiums and the highest deductibles; platinum plans have the highest premiums and the lowest deductibles.

Before the new relief package, people with incomes greater than 400% of the federal poverty level typically didn’t qualify for subsidies to reduce their premiums. Now people with incomes up to 600% of the poverty level — up to $76,560 for a single person or $157,200 for a family of four — can qualify, according to KFF. (KFF’s calculator can show you how much you’d likely pay for ACA coverage.)

The relief package reduced premiums for the vast majority of people who buy their own insurance, McDermott says. In addition, nearly half of the 29 million currently uninsured now qualify for a free plan, he says.

Those with incomes below 250% of the poverty line also will benefit from reduced cost-sharing, which means lower deductibles and other out-of-pocket costs. At 150% of the poverty line — income of about $19,000 for a single person and just under $40,000 for a family of four — people qualify for zero-premium silver plans with annual deductibles of just $177.

Millions of unemployed people will be eligible for similar coverage. Anyone who receives unemployment benefits for any part of 2021 can qualify for a zero-premium silver plan with the maximum cost-sharing reductions, McDermott says. “For all intents and purposes, the health insurance exchanges are going to look at you as if your income was under 150%” of poverty level, he says.

This new provision for the unemployed may not be reflected on HealthCare.gov and most state-based exchanges until this summer, and perhaps not until fall, McDermott says.

“It is my understanding, though, that if these people enroll in coverage now and can prove that they received unemployment benefits at some point in 2021, then the benefits will be retroactive and they will eventually be reimbursed for the unnecessary expenses they incurred,” McDermott says.

How to qualify for ACA subsidies

The expansion of Affordable Care Act subsidies is retroactive to Jan. 1 and will continue through Dec. 31, 2022. People must purchase their insurance from Healthcare.gov or their state’s ACA exchange to qualify for subsidies. The act also created a new special enrollment period that extends through Aug. 15, 2021.

Some people still don’t qualify for subsidies, including most people with incomes above 600% of the poverty line; undocumented immigrants; people who have offers of employer-provided health insurance that’s considered affordable; and certain low-income people in states that haven’t expanded Medicaid coverage.

What you should know about free COBRA coverage

Many people prefer to keep their employer’s health insurance coverage when they lose their jobs, although the cost is often prohibitive. Most employers pay a large portion of the cost to cover workers, but former employees who opt to extend their coverage using the federal COBRA law typically must pay the full premium plus a 2% administrative fee.

Thanks to the new law, employers are required to provide free COBRA coverage from April 1 through Sept. 30 to eligible former employees who lost their health care coverage because of involuntary termination or a reduction in hours, says financial planner and certified public accountant Kelley Long, consumer financial education advocate for the American Institute of CPAs. The employers’ cost will be offset by federal tax credits.

If you’re eligible for other group health coverage — through a spouse, new employer or Medicare, for example — you won’t qualify for free COBRA.

“The intention is to help people who have no other options and would otherwise be uninsured because they can’t afford COBRA,” Long says.

Normally you have 60 days after you lose your job to opt for COBRA coverage, which typically lasts a total of 18 months. If you missed that 60-day window, or signed up but then dropped coverage, you may have another opportunity to enroll. The new law extends the sign-up period so that people who lost their jobs during the pandemic can get the free coverage. Employers are required to reach out to eligible former employees by May 31. If you think you’re eligible but you haven’t heard from your employer, McDermott recommends contacting your former employer’s human resources department.

There will be a special enrollment window at the end of September to allow people with COBRA to switch to an ACA plan, McDermott says.

This article was written by NerdWallet and was originally published by the Associated Press.

Liz Weston writes for NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.

The article You May Qualify for Free or Cheaper Health Insurance Now originally appeared on NerdWallet.

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What to Do If Your Refund Is Delayed and Your Bills Aren’t

Posted on by Laura McMullen

The IRS is behind on processing tax returns, due to staff shortages and other complications. This delay could be holding up the money you were counting on to cover your bills.

Many people were looking to their tax refunds to do some major lifting, according to a NerdWallet survey published in February. Among filers expecting a refund, 32% say they planned to use it to pay down debt and 30% planned to catch up on bills.

If you were expecting — and needing — to have a check in hand by now, here’s how to keep your finances together until Uncle Sam pays up.

Prioritize necessities

If you’re really strapped, limit discretionary spending and focus on paying for essentials like housing (mortgage or rent), groceries and utilities. Prioritize expenses that enable you to work and earn money, such as transportation and child care.

Consider essential expenses you have to pay now, but look ahead to June and July, too, says Brent Weiss, a St. Petersburg, Florida-based certified financial planner and co-founder of Facet Wealth.

Check for large upcoming bills so you can plan for them now and aren’t scrambling all over again in a few weeks. For example, if you have an annual bill due in June, Weiss recommends calling customer service to see if you can pay it in a monthly cadence instead. If so, you’ll be on the hook for a much lower payment next month.

Call lenders and service providers

Prioritizing bills is one thing, but having the means to pay them is another. If you can’t pay the rent or mortgage and other bills in full, pick up the phone.

A call to customer service can be an effective way to get a bill lowered or deferred, and all it costs is a bit of time. Missing payments, on the other hand, can lead to late fees, dinged credit and worse.

On the phone, be calm and explain the situation. The person on the other end is often willing to help, Weiss says, particularly in situations like this, when you’re facing something outside your control.

In fact, if your income has been affected by COVID-19, you may be eligible for payment help from your credit card issuer or personal loan lender.

As for your mortgage, look into forbearance, which allows you to pay lower monthly payments, or delay payments, for a certain period of time. Some lenders offer forbearance programs specifically for borrowers affected by COVID-19.

Get free advice

Your lenders and service providers are far from the only organizations that can help. The Association for Financial Counseling & Planning Education, or AFCPE, currently offers a free virtual session with a financial counselor or coach.

These professionals can help you with the basics of personal finance, like which expenses to prioritize when you’re tight on cash, says Justin Nichols, a certified financial planner and co-founder of Garrett Investment Advisors in Manhattan, Kansas.

To register for a session, visit the AFCPE’s website.

For help to cover basic needs, visit or call 211. You’ll be connected with resources and programs that may help you pay bills and rent, secure food, access internet services and more.

Prepare for next year’s taxes

If you’re waiting on a massive refund, it’s likely because you took advantage of a large amount of refundable tax credits or you’re withholding too much on the W-4 form you gave your employer, says Nicola Cyr, an enrolled agent (a federally authorized tax practitioner) and manager of advisor services and investments at Garrett Investment Advisors.

If it’s the latter, you’re basically giving the government an interest-free loan that is repaid in the spring. Reduce the withholding amount, and you’ll take home more money each paycheck and receive a smaller refund.

In other words, if you expect a $3,000 refund later, wouldn’t you prefer to get $250 per month now? As Weiss puts it: “At least it’s available to you and not sitting in the ether somewhere with the IRS.”

Weiss recommends scheduling a time at least twice a year to review withholdings to prevent a giant refund or nasty tax bill.

As for preventing delayed refunds, Weiss suggests filing early and electronically, rather than mailing a paper tax return. And opt to get your refund by direct deposit, instead of a paper check. Weiss says the filers who followed those steps likely already received their refund this year.

Laura McMullen writes for NerdWallet. Email: lmcmullen@nerdwallet.com. Twitter: @lauraemcmullen.

The article What to Do If Your Refund Is Delayed and Your Bills Aren’t originally appeared on NerdWallet.

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How to Travel Safely and Cheaply This Summer

Posted on by Sam Kemmis

As vaccination rates inch upward, Americans are beginning to travel again. More than 10 times as many passengers passed through Transportation Security Administration screenings in the first week of April compared with the same period last year, a sign that some degree of normalcy is returning.

And travel this summer could get far busier.

“Right now, we’re still awash in cheap summer flights,” says Scott Keyes, founder of travel deals newsletter Scott’s Cheap Flights. “But with vaccinations accelerating quickly and interest in travel spiking, cheap summer flights may not be available much longer.”

Yet the question of whether it’s safe to travel remains. Infection rates remain high, despite accelerating vaccination efforts. Even vaccinated individuals are realizing that they may not be in the clear to return to life — and travel — as normal.

How to travel safely

Getting fully vaccinated is the first step toward travel safety, but it’s not the last. The Centers for Disease Control and Prevention have issued updated guidelines for vaccinated travelers, giving the go-ahead to domestic travel. Yet it still recommends following the familiar protective protocols: wearing a mask, maintaining social distance and avoiding crowds.

“Even with a vaccine, the fundamentals of COVID-19 still apply,” Dr. Jessica Shepherd, chief medical officer of Verywell, an online health website, said in an email. “With travel, only the scenery changes, not the reality. As we move towards more of a normal life, it is important to approach it carefully rather than abruptly in lifestyle changes.”

If the CDC recommends maintaining social distance, is it safe to fly at all?

“This risk of transmission in airplanes is relatively low as the airflow in current jet airliners is much faster than normal indoor buildings and half of it is fresh air from outside,” she said.

How to travel cheaply

Although many factors will affect the cost of your potential vacation, one looms especially large: timing.

“I’d start booking as soon as possible,” says Matthew Kepnes, founder of Nomadic Matt, a budget travel website. “There’s a lot of deals out there right now, but they won’t last long … so my advice is to book soon.”

This strategy also takes advantage of a seismic shift in airline policies.

“Many travelers may have missed the fact that all full-service U.S. airlines have permanently gotten rid of change fees if you book a ticket in main economy, premium economy or business/first class,” Keyes says.

Aside from basic economy, most fares are now far more flexible than before the pandemic. This creates an incentive to book sooner, then rebook if plans fall through.

Experts also recommend looking for deals, rather than trying to travel to popular (and expensive) destinations. Average airfares might rise, but deals will remain if you hunt for them.

Then, there are always travel rewards, which have been piling up in many accounts throughout the pandemic and can offset the costs of travel — but only if you use them.

Where to travel

Before you book a flight overseas, know that most countries are still enforcing restrictions on U.S. travelers and that the CDC and State Department have issued blanket “do not travel” advisories for most countries worldwide, even for vaccinated travelers. That doesn’t mean international travel is off the table, but it does limit the options.

“There are countries like Mexico and Costa Rica where Americans can visit today without any COVID prerequisites like testing or quarantine,” Keyes says. “(And) there are a growing number of countries like Iceland and Belize that allow fully vaccinated Americans to bypass any testing or quarantine requirements that are mandatory for unvaccinated visitors.”

And many countries remain fully off-limits to U.S. travelers for the foreseeable future. Even countries that are allowing tourists, visitors are still subject to local restrictions and curfews. Do your research beforehand to make sure you can enjoy your destination once you get there.

The U.S. will still require a negative COVID-19 test three days or less before your return flight. So even if you are vaccinated, you will need to spend time at the end of your trip obtaining a negative test.

Some of these restrictions are bound to change this summer, but it’s impossible to know which ones, or when. So many travelers, including the experts, are again opting to travel domestically this year.

“I’m about to embark on a seven-week road trip around the U.S.” Kepnes says. “I’ll be focusing on national parks and outdoor adventures.”

Sound familiar?

This article was written by NerdWallet and was originally published by The Associated Press. 

Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article How to Travel Safely and Cheaply This Summer originally appeared on NerdWallet.

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Haven’t Filed Your Taxes Yet? Act Soon to Avoid Penalties

Posted on by Alana Benson

It’s easy for taxes to get lost in the shuffle of life during a normal year. This past year, that shuffle was intensified by the stresses of a pandemic.

Thankfully, the IRS extended the deadline for paying 2020 taxes from April 15 to May 17, so people have a bit of extra time to get their paperwork in order.

But after that extended May 17 deadline, it will be business as usual: Late filings or payments could result in penalties and/or interest. Here’s what to expect if you’re running behind, and what you can do to mitigate the damage.

What happens if you file or pay late

If you file taxes late, the penalty is usually 5% of the tax you owe for each month your return is late (up to five months). For a return that’s more than 60 days late, the minimum penalty is $435 or the tax you owe, whichever is smaller. If you’re getting a refund from the IRS, on the other hand, then there’s no penalty for filing your return after the deadline (though that may not be true for state taxes). That said, you won’t receive the refund until you file.

If you pay taxes late, the IRS may charge interest on what you owe until the balance is paid in full.

What about consequences aside from fees? “It’s very hard to go to jail for not paying taxes,” says Chris Whalen, a certified public accountant in Red Bank, New Jersey. “You would have to owe a lot of money.” However, it is possible for the IRS to levy your paychecks or put a lien on your property if you don’t pay your tax debt. You’ll likely get several letters in the mail before that happens, so be sure to keep your address on file with the IRS up to date.

Want to avoid penalties? File on time

The easiest way to avoid penalties from the IRS is to file your taxes by the deadline, or get a tax extension if you won’t be able to do so. But there’s a key detail to know when it comes to filing an extension. “The most important thing to remember is that an extension of time to file a tax return is only an extension to file the paper,” Whalen says. “If you don’t pay any tax due, you’re going to get a late payment penalty.”

Because of this year’s extension, interest and penalties on unpaid balances won’t begin to accrue until May 17. According to Brian Miller, CPA and managing partner for Zuna Financial Services in Portland, Oregon, those penalties could be worse if you also don’t file your return on time. “If you didn’t file your taxes by the due date, the IRS is going to charge you a much higher tax percentage than if you file your taxes by the due date and just don’t pay on time,” Miller says.

Pay what you can, when you can

Once you’ve filed, try to pay your debt by the deadline since penalties and interest will start to accrue over time. If you can’t pay the balance, you can contact the IRS to set up a payment plan or offer in compromise. A payment plan, or installment agreement, lets you pay the taxes owed over a longer period of time. An offer in compromise lets you settle the tax debt for less than what you owe. Payment plans are more common and often easier to obtain than offers in compromise, and you can apply for a payment plan online.

Talk with a professional

If you owe money to the IRS, it can be intimidating to pick up the phone and ask what your options are, but according to Miller, that’s exactly what you should do.

It’s not just intimidation that keeps people from being proactive — often, taxpayers have trouble understanding the IRS, Miller says. “A lot of times it’s the verbiage accounting professionals use. And that’s why having a CPA call the IRS and work on their behalf is helpful, because we speak the same language.”

If you can’t afford to work with a tax professional, there are free tax help resources that may clarify what options would be right for you.

Alana Benson writes for NerdWallet. Email: abenson@nerdwallet.com.

The article Haven’t Filed Your Taxes Yet? Act Soon to Avoid Penalties originally appeared on NerdWallet.

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What to Do When You Can’t Open a Bank Account

Posted on by Margarette Burnette

Signing up for a bank account is usually easy. But just as an application for a credit card might not be approved, a bank or credit union could deny an account application.

If this happens to you, be aware that you have other options. However, it’s a good idea to try to learn why the bank made the decision. Of the 7 million U.S. households that don’t have a bank account, about 20% say one reason is because of ID verification, credit problems or issues with a former bank account, according to a 2019 Federal Deposit Insurance Corp. survey. Other reasons include customer concerns about keeping the minimum bank balance and inconvenient bank locations.

If you’re unable to open a bank account, here are some tips on what to do next.

Verify your details

When you apply for a bank account, you usually have to provide your name, address, Social Security number and other personal information. Errors in any of these items can affect your application.

Your bank will likely work with third-party companies to electronically verify your application information, says Sarah Hoisington of SentiLink, an identity verification company in San Francisco. If the data can’t be confirmed, the bank is notified, she says.

“Fraudsters sometimes mix real data with made-up data to create a fake identity,” she says. You may be asked to provide additional documentation to prove who you are, such as a copy of your driver’s license, or it may lead to a denial.

If you believe you may have listed incorrect data on your application by mistake, consider reapplying.

Review your consumer reporting files

It’s possible your bank may have confirmed who you are, but denied opening an account because of a record of unpaid bank fees or overdraft charges, for example. Banks rely on consumer reporting agencies such as ChexSystems or Early Warning Services for information on applicant banking histories. When this information causes a denial, you have the right to receive a copy of your file.

The file could list outstanding debts from old accounts, the status of those debts (paid or unpaid) and whether a past account was closed due to suspected fraud. You can use the information from the report to contact the previous bank and pay off any outstanding fees or dispute errors. You could also file a dispute directly with the reporting agency. To reach ChexSystems, call 800-428-9623. For Early Warning Services, call 800-745-1560.

Chip Kohlweiler, vice president of security at Navy Federal Credit Union, says it’s also a good idea to double-check your financial history and personal information with organizations that verification companies might contact, including “entities such as credit bureaus, government agencies and utilities.” For example, you could pull your credit report to confirm its accuracy.

It might seem like an extra step to take, but it actually helps speed up the application process when prospective member information is accurate, he says.

Consider other options

It’s likely difficult to have a bank account approved if you have a consumer reporting agency record. In addition, young adults and recent immigrants may not have a U.S. banking history for these agencies to verify. This may mean you can’t open a traditional account today, but it doesn’t have to stop you from accessing banking services. Here are some other options to consider.

Second chance checking

Some institutions offer second chance checking accounts specifically for customers who can’t qualify for a traditional option. The alternative account might lack some features, such as overdraft protection or the ability to avoid monthly fees, but it gives customers a chance to develop a solid banking history. (Note that this option generally doesn’t involve applying for loans, so it won’t help you build a credit history.)

If you keep a second chance account in good standing for 12 months, your bank may switch it to a regular checking account. Once you reach that milestone, you may be able to shop around for top-notch checking and savings accounts.

Free online checking

If you live far from a branch or are worried about monthly fees, know that you can access some accounts online, and they don’t require a minimum balance or monthly fee.

Prepaid debit cards

Many prepaid debit cards let you access important banking functions, such as direct deposit and electronic bank transfers to help you build an emergency savings fund. They are generally available to customers regardless of banking history. Some of the best choices have no or low monthly fees and access to thousands of ATMs.

Not being able to open a bank account shouldn’t mean not being able to access banking. Whether you resolve the account issue directly with the institution or choose to shop around, there are a number of solid financial service companies that would be happy to have your business.

Margarette Burnette writes for NerdWallet. Email: mburnette@nerdwallet.com. Twitter: @Margarette.

The article What to Do When You Can’t Open a Bank Account originally appeared on NerdWallet.

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