What You Should Know About ChexSystems

Written by on February 15, 2011 in Money - 3 Comments | Print this page


Loan ApplicationBeing listed in ChexSystems can definitely pose a lot of problems so you need to be conscious of what you should know about ChexSystems to avoid their dreaded list.

Check System or ChexSystems is a consumer reporting agency; they keep track of closed bank accounts with issues. Your name will be reported to ChexSytsems if you provided wrong information on your account, you committed several overdrafts, non payment of your overdrafts, bounced checks and any type of fraud and bank violations. ChexSystems provides information on more than 80 percent of banks. The banks are the one who are going to decide how the information will affect your existing account.

If you are listed with ChexSystems your name will stay on record for 5 years. It will definitely limit your financial options. Most banks will not allow you to open a checking account with them. Some will provide you a leeway if you could provide proof that whatever balances you had with your previous banks were settled.

The bank that reported you is also the one that could remove you from the list. You can negotiate with your bank that you will pay all your outstanding balance if they will remove your name on their list. It’s the fastest way to get rid of the problem and you will be able to open a new checking account with a new bank.

Once your name is included on the report banks will still deny you application for a checking account or even just a regular account – even with a good credit score. To avoid being on the list never provide wrong information on your account. Always check your balance so that you will not over withdraw or if you have overdrafts pay for them right away.

There are many who complained that many reports in ChexSystems are not really accurate and since banks rely heavily on these reports and not on a good credit score to decide whether you can open an account with them, inaccurate information is definitely an annoyance that needs to be corrected.

Under the Fair Credit Reporting Act (FCRA) if you were denied by banks because of ChexSystems you can ask for a free detailed report within 60 days of denial. Some people don’t even know that they are on the list until a bank rejects them. If you found out that there is inaccurate information on your report you can demand it be removed immediately.

The bank should be able to provide proof of your banking mistakes if not it’s their responsibility to remove your name from the list. You can file a case against them if they fail to do so. If you are a victim of identity theft you can also ask for your account to be put on fraud alert. This will block the information connected to the fraudulent activity on your account and won’t affect your credit score.

If you did everything and you can’t still get your name off the list you can open a second chance checking account with banks that don’t use ChexSystems. Just do your research and check if the bank has all the services that you need.

You should always keep track of your ChexSystems report and you can always ask the Federal Trade Commission (FTC) of what you should know about CheckSystems and how to protect yourself from inaccurate reports.

There’s more where this came from.  The Credit Doctor has useful and easy to use information that will help you fix your credit.  Find out for yourself what is a good credit score.

Image: vichie81 / FreeDigitalPhotos.net


About the Author

Alana Johnson

Alana Johnson tries to enjoy the simple things in life and writes for the Lifestyle category on Quality Life Resources. Living in the small New England town of Norwalk, CT, she looks forward to the warm summer months. To submit your own article for my category, please click HERE. View all Self Improvement articles.