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ChexSystems - What You Need to Know

By Edited May 11, 2014 0 0

Unfortunately, ChexSystems is not a term most people are not aware of until it is too late. While some stores and banks have the ChexSystems stickers or placards, most people do not give much attention to the name until they have been turned down or had their bank account closed. So what is ChexSystems and why are they important to you?

ChexSystems is a network of banks and/or credit unions that share information concerning your banking practices with other member banks. This could include passing bounced checks, not paying NSF fees and other activities that could be considered fraudulent.

Since ChexSystems is considered a consumer reporting agency like Equifax or Trans Union, they can share information about you with other member banks. This information lets other member banks know your past banking history and gives an indication of if you are considered a good "risk". One thing to remember is that ChexSystems does not make the decision to let you open the account and is only used as a tool by the bank. The actual decision to allow you to open a checking account is done by the bank and is based solely upon their current business models.

A common misunderstanding about ChexSystems is that they give you bad credit, are the cause of your bad credit or that you have to have bad credit to be listed in the ChexSystems database. Chexsystems is only concerned with your banking activities (savings and checking) and has nothing do do with your bad credit and does not cause you to have bad credit. In fact, you could have a strong credit score and still be listed in the ChexSystems database due to a past mistake with a checking or savings account.

If you have recently found out that your listed in ChexSystems, there are some things you need to know.

You have done something wrong - I know what you are thinking and that the statement sounds harsh, but it is the truth. It could have been a simple mistake, but you have done something to be listed. For example, you have not paid an NSF charge or you closed a legitimate account when you moved and have money that is owed. While there have been instances that people have been reported to ChexSystems due to a mistake, these occurrences are few and can be cleared up.

It takes time - Each occurance is listed for 5 years and it is nearly impossible to get around this. Just
like your Equifax and Trans Union credit reports, there is a reporting period and getting a negative listing removed from your Chex report early is extremely difficult.

Customer Service ... forget about it - ChexSystems is known as being unrelenting and unforgiving. As bad as it may be, there is a reported lack of customer service and help getting anything resolved when contacting customer service is seen as useless.

So what do you do if you have been listed?

Know what they are saying - Get a copy of your ChexSystems report and verify the accuracy of that report. Make sure everything that has been said is 100% truthful and be prepared to back up your claims. Unfortunately, you are guily until proven innocent. You can get a copy of your Chex report by calling 800-428-9623.

Pay what you owe - I know that times are hard right now, but you need to pay this money and get the issue resolved as soon as possible. Then and only then will you be able to move forward and start getting your financial train back on track. Otherwise, you will wait 5 years to have the instance removed from your Chex report and the delinquent account may be reported to a collection agency and this will then start harming your credit report. If you can't afford to pay it all, contact the reporting bank and make arrangements to get the debt paid. Just make sure you do all correspondence in writing and send via certified return receipt mail to protect yourself.

Get a second chance - Start looking for a second chance checking accounts. Fortunately, there are banks and other financial institutions that will work with you and offer second chance checking accounts. While this may sound like a lifesaver, you need to look at the offer and make sure you are not getting ripped off. Start out looking for local banks and be very careful when doing business with any online only financial institution. Do not send any money without doing your due diligence.

Avoid the scams - I know the offers sound tempting, but avoid businesses that offer ChexSystems removal services. This is the same concept as credit repair and should be avoided. They can not do anything anything you cant do yourself and all your paying for (if they actually complete the services) is convenience.

I know being listed in the ChexSystems database is not what you need or want, but it is what it is. You
need to move forward. So start taking control and get the issues resolved. While working on getting
issues resolved, check out Second Chance Checking Banks for a state by state directory of banks in your area that may allow you to open a checking account.



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