What is ChexSystems?

WHAT IS CHEXSYSTEMS?

We receive emails regularly from consumers indicating that they are having issues with their credit, can't get approved for loans and/or are unable to open a checking account because they have a record with ChexSystems. Below we explain more about ChexSystems and how it works.

What is ChexSystems?
All of the banks and credit unions in the United States report incidences of negative account activity to ChexSystems. They do this so that they can guard themselves and other banks from working with consumers in the future that have not been able to maintain their accounts in the past.

Why would I be reported with ChexSystems?
There is always a 'cause' that will equate to you getting reported. It is important to understand what sort of activity will be labeled as a 'cause'. All banks have different reasons for having to close a customer's account. Below are a few examples:

- Your bank was not able to collect on an ATM transaction, overdraft, and/or automatic payment which they credited on insufficient funds. It does not matter how little or how much and typically devoid of waiting no more than two or three days.
- Abuse of a debit card, ATM or savings account.
- Numerous overdrafts.
- Any sort of fraudulent activity on any level.
- When opening any type of account you provide erroneous or false information.

How long does negative information say on my ChexSystems record?
From the date an episode occurs, it will be reported with ChexSystems for five years. If you discover erroneous info on your ChexSystems file, you will need to take steps to have it removed. Learn more.

How can I find out if I am reported by ChexSystems?
Consumers are able to obtain their ChexSystems report for free annually by visiting their website here, similarly to being able to receive a free copy of your credit scores from from TransUnion, Experian and Equifax.

What is the impact of being on ChexSystems?
You can expect your financial well-being to be jeopardized if you ever have activity reported to ChexSystems. The majority of banks will not allow you to open a new checking account even if you have just one episode reported to ChexSystems. But, you should be able to obtain a second chance checking account. These types of accounts have limited account function but good positive account maintenance will result in an improved Chex Systems rating.

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