What is a ChexSystems report and what banks uses them?

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Financials. It’s a topic most people dread. It is even worse when you know your bank accounts haven’t had the brightest or cleanest history about them. If that sounds like your bank accounts, then this article is for you.

You may be wondering why you were denied by a bank while trying to open a new checking account. ChexSystems is likely the culprit of your poor reputation. But don’t worry, we will walk you through what ChexSystems is, what it is for, how you can find your report, and even wipe out your information from their system!

ChexSystems are reports that hold information about banking mistakes from the past, such as unpaid fees, undisputed checks and fraudulent activity. Banks will investigate your checking account through ChexSystems to determine if they want to accept or deny you based on your financial past. Bad news is that it could raise many red flags for you when trying to do anything with your current bank or a new one.

ChexSystems is an agency that creates reports for ay unresolved issues that you may have encountered in the past with your checking accounts. The reports’ information includes: any unusual or fraudulent activity or any type of account misuse over a five-year period.

According to the National Consumer Law Center, about 80% of banks and credit unions confirmed that they receive reports and information regarding customers from ChexSystems. By using this method, it helps banks decide whether they want to continue working with applicants to open new bank accounts with them. The agency will collect the consumer history reports and develop risk scores.

ChexSystems is owned by FIS. FIS Global provides banking and payment technology, processing services and information based services to major banks. Their goal is to help businesses make the complex, clearer. They are headquartering in Jacksonville, Florida and employ 52,000 people globally. FIS focuses on retail and investment banking.  

ChexSystems is governed by the Fair Credit Reporting Act that:

promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies

What a ChexSystems Report Includes

ChexSystems reports act as bank statements and are meant to paint a picture of your activity. Unlike credit unions where they focus on only your credit history, they collect information about your checking account.

  • Public records
  • Unpaid fees
  • Account inquires
  • General information
  • Unpaid balances
  • Fraudulent activity

You or your bank can request a report or risk score from ChexSystems. These reports will provide with all relevant information. Anyone can request these reports or scores from the agency. The ChexSystem’s report, however, will give you a better idea as to why you were rejected by a bank.  

Risk Score: Risk scores are scores that show banks you are not a high risk customer. The higher your score, the better chance you have at opening accounts without problems.

As all of your activity is scored. The Consumer report draws up a number, that number is considered your score. Scores range between 100 to 899.

Report: Also known as the “Consumer Disclosure,” a term coined by ChexSystems, shows items related to all of your account history. These Consumer Disclosures will show you items like unpaid fees from overdrafts, bounced checks, and suspected fraudulent activity. The report will also contain information such as credit inquiries, consumer initiated freezes, or if you were a victim of identity theft.

You can learn how to Request your Consumer Disclosure Report easily through the ChexSystems’ website.

If you are having problems with opening a checking account it is likely that ChexSystems is to blame. For closed accounts, they call them “for cause,” meaning: there was incorrect on false information regarding the account, several bounced checks over a short period of time, lack of payment of insufficient funds, overdrafts, fraud, any abuse of a checking, savings, or any type of transaction, or any bank rule violations.

What is ChexSystems Used For?

ChexSystems is a reporting agency used by banks and consumers to provide reports on checking accounts or other information regarding specific and/or suspicious activity.

ChexSystems can be used for “freezing” your banking reports. You have the option to request a freeze on your report. This will stop the reporting agency from releasing your reports and confidential information without your authorization. This freezing action will not stop or prevent any necessary pre-approval screenings for new credit. No fees are required to be paid for requesting a freeze. Freezing fees will depend on your residence.

Banks and ChexSystems

Banks, especially, use ChexSystems to identify whether they would like to pursue a customer and allow them to open a checking account with them. The ChexSystems report helps banks and lowers their risks of onboarding a new customer attempting to start a profile with them.

Yes, banks will typically use ChexSystems to identify if a new customer opening an account with them will result in risk. ChexSystems are the helping hand to banks where they can carefully screen applicants and review full financial reports for problems the applicants may have had in the past such as unpaid debt, past due fees, or any suspicious activity on their checking accounts from the past 5 years.

You can use ChexSystems, as well. You can order a report of your financial background. Your report will be mailed and arrive within five business days. The good news is that the shorter your ChexSystems report is means that you have the least amount of negative account activity and history!

Once you are in the ChexSystems, it will decrease your chances of opening up new accounts at banks.

Using ChexSystems Online

Yes, you can check ChexSystems online and request a report from them by visiting their website. Other than gaining access to your reports, you can learn more about identity theft, freezing reports, disputing information, or simply contacting a representative.

Anyone can use ChexSystems. You can order a personal report that will give you all of the information about your account history.

The report includes: Check writing history and checking account applications, openings, and closures.

Review your report and if you find that there are inaccuracies you may dispute them. If there is a case where you have been a victim of bank fraud or check writing fraud, your report will show all activities.

Every consumer is allowed to order one free report each year. According to the fair and Accurate Credit Transactions Act, consumers can now order their free ChexSystems report yearly!

Reading your ChexSystems report goes a little like this. You will be shown a lot of information including:

  • Source of Information
    • Bank / Credit Union with information about you and your accounts.
  • Reported Name
  • Reported Address
  • Reported SSN/ID
  • Driver’s Licence
  • RTN
  • Account
  • Date Reported
    • Day complaints began about your referred accounts
  • Reported For
    • A description of your account and reported incident that occurred i.e. Fraudulent activity, unpaid fees
  • Closure Status
    • Reports if the issue was resolved
  • Closure date
    • Resolution date

Credit Unions and ChexSystems

Yes, both banks and credit unions will use ChexSystems to reveal your past information to them. Here is a list of banks and credit unions that do and do not use ChexSystems:

Do:

  • All America Bank
  • Avidia
  • Blue Federal Credit Union
  • CIBC
  • Citi

Do Not:

  • ACNB
  • Bank of America
  • TD Bank
  • U.S. Bank
  • Wells Fargo

For the complete list of banks and credit unions that do and don’t use ChexSystems click here.

Banks That Do Not Use ChexSystems

There are a handful of banks that do not use ChexSystems. Just to name a few:

  • TD Ameritrade:
  • Axiom Bank
  • Woodforest National Bank
  • United Bank
  • Southwest Financial Federal Credit Union
  • Green Dot
  • Wells Fargo Opportunity Checking

ChexSystems is a commonly used reporting system by banks. There are however, banks that choose not to use it. It is not uncommon to find banks that will not take the take to check your records.

There is a term called “second chance banking” if you have had a few negative incidents on your ChexSystems report.

If you are interested in getting approved for the second chance banking, you can use overdraft protection, if this is a common problem you have had in the past.

Disputing ChexSystems

There are a few reasons why your report may contain errors. Mistakes happen all the time. No bank is perfect and information can input incorrectly. It happens. Bank employees may be typing in information too quickly or end up inputting numbers that don’t match yours. Descriptions could be poorly written and be misinterpreted. The incident may have been written incorrectly.

Another reason for error could be because of fraud and/or identity theft. IF you have ever beena victim of fraud, you know that identity can easily happen and become a huge headache to deal with. With technology today, people can steal information from others and use it to their advantage. There are people who try to pose as you and try to use your bank accounts.

In the case that you notice missing/incorrect information or random activity  after reviewing your report, you can legally submit a dispute through the ChexSystems’ website. Under the discretion of the FCRA, the agency and company must complete an proper investigation of your dispute, for free. Any errors must be corrected by the company that provided the false information.

If it so happens that you find incorrect personal information on your ChexSystems report, such as incorrect addresses, social insurance number, incidents that may have never occurred, no closure reports for resolved matters, you can definitely dispute this and ensure that all mistakes be corrected immediately. If you believe you were falsely accused for fraudulent acts on your bank account, you can bring it up in the dispute and to your financial institution for providing false information to ChexSystems. Always check that your information is correct with all of your banks and credit unions to ensure that these problems and misinformation does not happen again and save yourself the trouble.

Here are some steps you can take when filing your ChexSystems dispute:

  1. Mention the error in your report. Circle, underline, or highlight the error on the physical report. Make sure you photocopy one to send back to the bank or ChexSystems. Do not send them the original. Instead, keep the original for yourself.
  2. Use the right forms to file your dispute. You will need separate forms to file more than one dispute on different matters. Make sure you prepare the proper letters and include all of the necessary information.
  3. After gathering all of your forms, information, and dispute letters, you cane either dispute your case online, by mail, or by fax.

Completing the online forms requires you to read and review the directions on how to properly fill out the forms. Agree to the Terms and Conditions below. You will also be asked if you received your Consumer Disclosure Report.

Fill in all of the necessary information on the form and follow the instructions on the page. There will be a section titled “Dispute 1: Details.” In this section, you can report what the dispute is, the source (Your bank), and the date of the problem item in your report.

In the section titled “Nature of your dispute,” you can complete your write-up about your dispute and explain what the issue is in a 2,000-character limit letter. You also have the option to upload attachments with the supported file formats being: JPG, BMP, PNG, TIF, TXT, RTF, PDF, DOC, DOCX. Keep in mind the limit is 25 megabytes. Remember to upload a photocopy of your report with the circled problem to support your claim.

If you have another item you would like to dispute, remember to file a new dispute under “Dispute Another Item.” If you have more than one matter you would like to dispute, you have the ability of disputing up to 50 items.

Once all of your disputes are complete, it is time to send your documents in. You can either send your documents:

  • Online: Enter your security code found at the bottom of the form, then click “Submit.”
  • Mail: Send your dispute directly to ChexSystems, Attn: Consumer Relations, 7805 Hudson road, suite 100, Woodbury, MN, 55125.
  • Fax: Send to 602-659-2197

Don’t forget to contact your bank and credit union and send them all of the documentation, dispute letter and any other pertinent information in proving your case.

Waiting for your response from ChexSystems? it could take up to 30 days.

ChexSystems and Your Information

The ChexSystems agency will keep your records on file for up to five years starting from the closing date of your account. Any money you owe the bank from overdrafts will stay on your ChexSystems record.

Your account can and will be removed if t is suspected that it was opened by someone else other than you or it was a due to identity theft.

Problems like these will limit you when it comes time to open a new account with a bank, and you will ultimately be denied.

If your ChexSystems report causes a bank to deny you from opening a bank account, you can order your report within two months (60 days) of denial.

Clearing Your ChexSystems Record

Have you had trouble opening an account at a bank and are wondering what the problem might be? It is possible that your bank has done their research and background checks with ChexSystems.

So how can your clear your ChexSystems record and start fresh?

  • You can start by Requesting your ChexSystems report. By reviewing your report, you will be able to understand why your bank ahs decided to disapprove your new account. You can request this report once a year. Want to request your report? You can call ChexSystems at 800-428-9623 or visit the ChexSystems website. You can fill out the Consumer Disclosure form and submit it online. If you prefer to send your form by mail, you can send it to Chex Systems Inc, Attn: Consumer Relations, 7805 Hudson Road, Suite 100, Woodbury, MN, 55125. If you would like to fax your form, the ChexSystems Fax number is 602-659-2197.
  • Dispute Errors online by visiting the ChexSystems website. You can fill out the dispute form and upload any files that are necessary to support your claim. When you have completed the form and have reviewed it, you may click “submit.” You can send your form via mail or fax, too. Simply print out the dispute form and fill it out. Include information and copies of documents. Send them to the Fax or Mailing address previously listed.
  • If you prefer to speak with a representative, you may call the ChexSystems phone line. Note that you are not allowed to attempt to resolve any disputes that relate to identity theft or fraud over this phone line.

Sometimes we get caught up in our day to day lives, work, and family. As busy as life gets, we have to pay off our debts. This is why it is important to pay any kind of debt you may still be owing. Pay it as soon as you can to clean your record.

Another way to clear your ChexSystems record is to ask creditors if they would kindly remove your information from the system. Ensure that you pay your debts proper to asking. Once this is complete, you can then request for your information to be deleted. Remember to keep any receipts or documents that have to do with paying your debts so that you have a paper trail in case they ask for verification.

Lastly, if you do not mind waiting, you can leave it until the 5-year mark for your information and records to be completely removed from ChexSystems.  

Account Closure

ChexSystems will not close your bank account. However, they can prevent you from opening new bank accounts. The only time ChexSystems will close your account with them is if you request it and request it by your financial institution.

Opening a New Account

If you have had previous problems with your ChexSystems account, then you will surely have difficulty with opening a new account. Check bank policies to ensure you are able to open a new account. Order and review your ChexSystems personal report before attempting to open anew account.

How to Keep Yourself Out of ChexSystems

If you have ever had negative activity on your checking accounts, it is likely those actions have landed you in the ChexSystems records. You may have not known, but ChexSystems has been keeping an eye on everyone’s checking accounts for any type of negative activity. Unfortunately, there are many people who cheat the bank and cannot be found anywhere in ChexSystems.

Something as simple as overdrafts and missing fee payments are of the most common reasons why ChexSystems would target someone. If you want to learn how to stay out of ChexSystems, you can do the following:

  • Always stay up to date on your bank account balances
  • Inquire about the length of time it takes for deposits to be credited to your bank account
  • Ensure you do not choose to write a check if there are insufficient funds in your account to cover it
  • Review your account before closing it by clearing all checks, stopping all automatic debits, and paying any unpaid fees

By taking these necessary steps, you will be able to have no problem staying out of ChexSystems.

Maintaining a Positive ChexSystems Report

It’s important to know the right steps to take in maintaining a glowing report on ChexSystems. If you recently discovered that ChexSystems has a profile report on you, you can rest assured that you have the ability to break the cycle and add some positivity to your report.

Want to learn how you can maintain a positive ChexSystems report? Here are ways you can do just that:

  • Halt automatic payments before you close a checking account: Sometimes it will take the bank more than a week to process any transaction that needs to be deducted from your account
  • Go to your bank or credit union to close your account: do not let your account become a negative balance before closure
  • Allow enough time when depositing checks: before writing against the balance
  • Be mindful with your joint accounts: If something were to happen to your joint account, both account holders will be accountable if something happens to it
  • Protect your debit cards: Never share your card or PIN number with anyone. Always keep this information private and do not write it down anywhere where someone could easily find
  • Avoid post dating any checks: Your account could get closed if you have bounced checks, you can cash them out early
  • Balance your check book: Avoid overdrafts and add account protection
  • Report stolen or lost checks: When you notice you have misplaced your checks, notify your bank immediately to protect yourself from any fraud that could come of the situation
  • Contact your bank if you are planning to change your address: Ensure your bank has all up to date and correct address information
  • Always look at your bank statements on a regular basis: to make sure there is no unusual activity or an item that doesn’t seem to coincide with your regular activity

You will never have a negative ChexSystems report if you follow these steps. The main takeaway here is that you should always be aware of your bank accounts. Regularly review your statements for any unusual activity. If you notice something doesn’t look quite right, or see that there is missing or incorrect information, notify your bank right away.

If you requested a Consumer Disclosure Report from ChexSystems and notice that they may have incorrect information about you or the numbers do not add up, submit a dispute as soon as possible. Resolve any issues between you, ChexSystems, and your financial institution for the least amount of worry.

Review any financial history, and if something looks suspicious, take action. ChexSystems reports are a great way to investigate your checking accounts and really get a clearer understanding of your financials.

It doesn’t hurt to order your Consumer Disclosure Report and review it so that you can stay on the right track.

Now, if you ever get denied by a bank in the future when you try to open a new account, remember ChexSystems is likely the one behind the decision banks make about their customers.

Open a bank account with one of the best forgiving non checksystems banks.

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By Cards Nerd