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If you want to open a new checking or savings account, the financial institution will likely run a ChexSystems report to assess the risk of working with you. Keep reading to learn what a ChexSystems report is, how to figure out if you have one, and what to do if you find yourself listed in ChexSystems.
What is ChexSystems?
ChexSystems is a consumer reporting agency that compiles data related to an individual's previous deposit account issues, including problems that led to the closing of checking and saving accounts. Banks and credit unions use ChexSystems to screen potential customers and decide whether to approve them for new accounts.
With a ChexSystems report, a bank can see if you’ve had any negative experiences with the bank, such as unpaid fees, bounced checks, or suspicious activities. If your past—and current—bank accounts are in good standing, you probably don’t have a ChexSystems report.
What does a ChexSystem report track?
ChexSystems collects information about your bank account history for up to five years. You may find some of the following information in a ChexSystems report:
- Personal identification information like your name, date of birth, Social Security number, and past addresses
- Unpaid negative balances
- Bounced checks
- Overdrafts
- List of accounts closed involuntarily
- Suspected fraud or identity theft
- Recent applications for other bank accounts
- Unpaid account fees
Based on your history, ChexSystems will assign you a score between 100 to 899 — the higher the better. When you apply for a new account, the bank or credit union may run a ChexSystems report to assess your banking history. If you have a negative record in ChexSystems, such as unpaid overdraft fees or a history of bounced checks, the financial institution may deny your application for a new account.
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Where can you get a copy of a ChexSystems report?
You have the right to request a free copy of your ChexSystems report once every 12 months. You can also request a report if you’ve been denied an account within the past 60 days.
To obtain a copy of your report, you can visit the ChexSystems website or contact them by phone.
Reviewing your ChexSystems report can help you understand why you may have been denied a checking account and identify any errors that need to be corrected. Keep in mind, however, that a bank or credit union is required to disclose why they denied your request.
What to Do If You’re Listed in ChexSystems
If you find yourself listed in ChexSystems, there are steps you can take to improve your banking history and potentially get removed from the database. Here are some tips to help you navigate being listed in ChexSystems:
- Pay off any outstanding debts or fees reported by ChexSystems. Repaid debts help demonstrate to banks that you are taking responsibility for your financial obligations, and they’ll eventually be removed.
- Contact the bank or credit union that reported you to ChexSystems. If you've already paid off your debts, get in touch with the institution and inquire about the possibility of updating your file in the database. Some financial institutions may be willing to work with you to clear your record.
- Consider opening a second-chance checking account. These types of accounts are offered to individuals with a history of banking issues. When used responsibly, these accounts provide you with an opportunity to rebuild your banking history.
Related Article
10 Bank Accounts That Don’t Use ChexSystems
The Bottom Line
If you’re in ChexSystems, don’t wait to address the negative records. The marks will stay on your report for up to five years, which could make it harder for you to open new accounts for some time. Make sure you work proactively to resolve any past banking issues so you can regain access to traditional banking services and improve your overall financial standing.
Slickdeals Money Staff
The Slickdeals Money editorial team is dedicated to helping readers navigate the personal finance space. We’re passionate about educating our readers on the very best financial tools & products on the market today.
