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Why you may have received a declined application

Getting a declined application can be frustrating. Learn about the most common reasons this happens and what you can do about it.

4 min. read

You’re ready to open up a new bank account and fill out an online checking account application but end up getting a notification or letter stating: your application has been declined. This experience can leave you wondering, “What’s next?”. Read on to learn why your account may have a declined application and what you can do.

What happens when you apply for a bank account?

You may be familiar with the fact that you can have a declined application with a credit card due to poor credit. Similarly, you can have a declined application for a bank account due to a couple of major factors. More often than not, your application may have been declined due to identity concerns or poor credit.

Poor credit

When reviewing your application, banks have minimum requirements you need to meet including your banking and credit history. Checking this background can provide an insight into your financial history, likelihood of paying on time and current debts.

If you are declined because of a poor account or credit history, contact one of the credit bureaus — Equifax, TransUnion and Experian — and request a copy of your credit report to see what may be affecting it. On top of that, you can also get your free credit report from all of the credit bureaus at

If you have a credit freeze in place with one of the credit bureaus, it means you’ve restricted access to your credit report, which could be another reason for a declined application. You can temporarily lift the freeze to open a new bank account by contacting your credit bureau directly.


When you apply for a bank account, the bank may use a reporting system like ChexSystems to look at your previous banking history. If you have a history of going into overdraft on your account multiple times, it can be a red flag.

Bounced checks

On top of going into overdraft multiple times, if your account history shows instances of having checks bounce often, that could be another reason for your declined application.

A bounced check occurs when you write a check and don’t have enough funds in your account to cover the transaction when the payee cashes the check. Having many instances of bounced checks may indicate to the bank that you aren’t managing the account in a responsible manner and can be cause for concern.

Unpaid fees

When you overdraft your account, you may have to pay overdraft fees or insufficient fund fees. If your overdraft too often or if there are unpaid fees listed on your account history, that can be another concern for banks. Eventually, unpaid fees could be sent to a collection agency. Once in collections, this mark could show up on your credit report and adversely affect your credit score.

“If there are negative marks that you can fix such as paying unpaid fees, then take action.”

Identity concerns

Aside from your financial history, you may have a declined application due to concerns around your identity. In today’s digital day and age, financial institutions are working to minimize fraud and identity theft.

If your application has information that appears suspicious, it could be flagged as a concern and may trigger a denied application.

Even small errors like a typo in your name, address, birthdate or Social Security number may result in a declined application. If you think you made an error entering your information, try applying online again. You can also contact your local branch or the call center to try and open your account with an advisor.

What to do next if you have a declined application

If you try to fill out an application for a bank account and you have a declined application, here are the next steps you should take.

Review your ChexSystems report and dispute any errors

If you have a declined application, you can access your Fair and Accurate Credit Transaction Act (FACTA) report from ChexSystem. You can also access your consumer disclosure report to better understand the reasons behind your denial. If there are errors be sure to dispute the information.

Pay off any unpaid fees

If there are negative marks that you can fix such as paying unpaid fees, then take action. You want to try to get in good standing to improve your chances of getting approved for a bank account.

Improve your credit

If your credit score was the main reason for your declined application, you want to take steps to improve your credit. Start by making your payments on time. Payment history has the highest impact on your overall credit score. Keep account balances low, so your credit utilization is less than 30 percent of your account limit.

You can also hold off on opening new lines of credit, which can lead to hard inquiries and may lead to a drop in your credit score. If you apply for too many lines of credit, that can be another red flag.

Bottom line

If you applied for a bank account and have a denied application, it’s worth looking into and figuring out next steps.

If you were declined due to a credit issue, BMO will send you an email or letter notifying you that your account has been declined. It will provide the contact information of credit bureaus you can get in touch with to review your credit report to check for any errors or ways to improve your score.

If you aren’t notified of a credit problem, then the issue might be related to confirming your identity. You can try applying again online. If you’re already a BMO customer, during the application process you’ll be asked to sign in to your account, which can help speed up the process.

A declined application doesn’t have to be the end of your account journey. See what you can improve for next time.

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