After a long day at work, you decide to pull out that overdue task list. At the top of the page is a reminder to open a checking account at a local community bank. They’re offering a $250 bonus to all new customers and you can certainly use the extra cash. So, you apply and to your surprise, the application is denied.
Upon calling the bank, you discover that there are issues with your banking history in ChexSystems that you weren’t aware of. What now? And what exactly is ChexSystems?
A closer look at ChexSystems
ChexSystems operates in the same manner as the three credit bureaus. It’s a nationwide specialty consumer reporting agency that stores negative information about consumer’s banking histories. This includes items such as:
- Excessive overdraft fees
- Closed accounts resulting from unpaid fees
- Bounced checks
ChexSystems retrieves information from financial institutions and provides consumer reports each time a bank processes an application for a new bank account.
How to access your ChexSystems report
To access your ChexSystems report you’ll need to visit ChexSystems.com and fill out the questionnaire to request a copy of your Consumer Closure Report. If you need assistance, call 800.428.9623 to learn more about requesting and reviewing reports. You should receive a hard copy of your report in the mail within 5 business days. Also, keep in mind that you’re entitled to a free copy of your report each time you’re denied for a bank account.
Disputing/Dealing with errors
After reviewing your report in its entirety, you’ll want to dispute inaccurate information promptly. To do so:
- Complete the online form found here
- Mail a copy of the Request for Investigation form to the address found here
- Fax a copy of the Request for Investigation form to 602-659-2197
(Important note: to ensure your dispute is includes all the required information and is formatted properly, be sure to review the document found here).
If there are accurate but old accounts that haven’t been resolved, try reaching out to the bank directly to resolve the problem. The collection agency will be happy to take your money, but chances are they won’t be willing to submit updated data to ChexSystems (or the credit bureaus if the account is already on your credit profile).
What if your dispute is denied?
Unfortunately, negative remarks will remain on your ChexSystems reports for five years. However, you have a few options to try and have them removed:
- File another dispute and provide more detailed supporting documentation to substantiate your claim
- Negotiate a settlement with the bank in exchange for the removal of the account and negative information from your credit file and ChexSystems report
- Request an override by the branch manager to open the account you’re applying for while working to rectify the error
Second-chance banking
Have you exhausted all your options and can’t quite find relief? You’re not banned from the world of banking forever (or for at least the next five years). It’s possible to open a bank account without ChexSystems because some banks don’t screen your banking history when reviewing applications. Or, you can explore second chance banking options.
The latter may come at a cost in the form of steep monthly maintenance fees, but it gives you an opportunity to build rapport with a new bank and explore other banking products sooner than later.
The bottom line
Even if you’ve been blacklisted by most banks due to ChexSystems issues, there’s hope. You have the ability to dispute inaccuracies, resolve banking issues and start fresh with a second-chance account. Or you can search for a bank that doesn’t use ChexSystems. Either way, it’s possible to find a bank that works for you.
Have you heard of ChexSystems? What do you think about it?
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