ChexSystems Explained
Most people don’t even know ChexSystems exist until a problem arises with their bank account. It may be that they can’t get approved for a new checking account or a bank has closed their current account on them and then they start hearing about ChexSystems. Read on to learn what exactly ChexSystems is and how it can affect your finances.
ChexSystems is basically a database that is used by a lot of banks to check a person’s financial history. Think of it like a credit agency company expect that it keeps track of people’s history with financial institutions. If a bank uses ChexSystems, which most of them do, they will check the database to see if you have been reported by another bank before they will approve you for a new account. This means if you have been reported by a bank in the past for too many overdrafts, fraud, or any other reason that may have gotten your past account closed on you, the current bank will most likely not approve you for a new checking account.
If you find that you have been reported to ChexSystems and you are having trouble getting approved for a checking account you do have some options available to you still. First, you can find a bank or credit union that doesn’t use ChexSystems or you can look for banks that offer second chance checking accounts. These types of checking accounts often come with higher fees and some restrictions but it can be a good way to get into good graces with a bank so you can eventually get a regular checking account.
If you feel that you don’t belong in the ChexSystems database and you have been denied a checking account in the past 60 days you can get a copy of your report to look over. When you get the report you can determine if the report is valid and how you can clear it up by paying off the fees you may owe. You can also dispute any reports that have been made on you with ChexSystems if you feel that it is not correct.
If you want to avoid ever being reported to ChexSystems then make sure you do absolutely everything you can to keep your accounts in the positive. If you find that your account is in the negative contact your bank to see if they will work with you before reporting you to ChexSystems and closing your account. This way you never have to mess with ChexSystems and trying to find a new account.