Restore Your Checking Privileges After ChexSystems Strikes

Thousands of consumers in the U.S. live with the aggravation of not being able to open a bank account after their prior bank account was revoked and their poor history reported to ChexSystems.

A checking account is much more than a way to pay for goods and services.  Checking accounts make conducting financial business safer, more convenient, and can offer you cost savings. Over 80% of banks in the US use ChexSystems, a consumer reporting agency that tracks consumers’ banking histories. If an account holder has too many non-sufficient funds (NSF) transactions, he or she may end up with a negative ChexSystems report. It takes 5 years for that negative notation to go away, and in the meantime, many banks will not offer an account to the affected consumer.

If you find yourself on the wrong side of a negative ChexSystems report, here are some ideas about how to restore your banking privileges:

Get your ChexSystems report:
ChexSystems is legally a consumer reporting agency like the credit bureaus, which means by law you are entitled to a free copy of your report annually, and under the Fair Credit Reporting Act you may dispute items contained in your report that you believe to be in error or obsolete.

Order your ChexSystems report online.

Second chance account:
The best way to find out if your past or new bank or credit union will overlook your negative ChexSystems items is to ask them. Some financial institutions offer a second chance account, and they may require you to take a CheckWise class and/or pay off any negative items on your report before opening a new account. Find out their requirements first.

Resolve the negative item:
If your ChexSystems report indicates that you owe fees to a bank or have a returned check outstanding, you will probably need to pay off that obligation and/or provide an explanation to your new financial institution before opening a new account.  Obtain a receipt and keep it with your important records.

CheckWi$e:

This program allows you to take a course on checking account management and receive a certificate of completion. Select financial institutions will accept that certificate and offer you a second chance account. Ask your financial institution if they participate in the CheckWi$e program and they can refer you to a local nonprofit agency in your area that offers the course. Some agencies charge a fee for the CheckWi$e course. The course is also available online. For more information, please visit: www.checkwise.org/register.php

Banks and Credit Unions that don’t use ChexSystems:
You may also try to find a financial institution that does not use ChexSystems. Unfortunately, this is not an easy task. Many lists that are available online are terribly outdated.  One ChexSystems-related site we found hasn’t been updated in 10 years! The other problem is that this kind of information changes constantly. We definitely don’t recommend paying any sum of money for a list of non-ChexSystems banks. Every such list we’ve seen is unreliable and not worth paying for.

It is also important to work directly with your bank or credit union if you’ve had your checking privilege suspended. Being proactive and speaking to your banking institution is key to avoiding problems in the future.

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