Turned down for a free checking account?

I recently applied for a checking account at my Universities credit union, keep in mind I applied for checking not credit, and was turned down on the basis of a credit report. Since when does your credit report affect non credit based accounts? Also, the kicker is I’m trying to open a checking account with a large sum of money so that I can pay off the debts that are causing the bad credit report. Are more banks doing this now or is it just a credit union thing?