Who is ChexSystems and Why Do They Have My Information?

ChexSystems is a private company that is utilized by banks in much the same way that the credit bureaus are used by lenders. Almost every bank reports to the ChexSystems database on specific criteria regarding their customers in order to help protect themselves from customers that have a history of fraud or bad financial practices. The banks report items such as how many checks you have bounced, frequent over-drafted accounts, unpaid balances upon account closure, and other acts that they would consider as problematic.

Since banks and other financial institutions lose billions of dollars each year it’s no wonder that they are actively trying to maintain a database that will enable them to stave off potential problem customers directly upon application. However, also like the credit bureaus, ChexSystems has been found to have a great deal of misinformation on the files they keep, causing embarrassing or even damaging consequences to the individuals that seem to always find out about it the hard way.

Seeing as how most people don’t know that ChexSystems exists before a problem has crept up on them, they are often confused as to what they are able to do to resolve the matter. Most people that find out they have derogatory remarks on their ChexSystems file find out when they apply for a online checking account at a new bank. Seeing as how commerce is nearly impossible these days without a legitimate checking account, if someone is denied that privilege it can mean more than just inconvenience – it can actually hurt their way of life.

Clearing your ChexSystems File

Fortunately, there are options for people that need the convenience and peace-of-mind that having a checking account will bring them. Most likely, they will want to have the detrimental remarks removed from the ChexSystems database. The likelihood that this will be accomplished easily is strongly dependant on the severity of the infractions that have been reported. For instance, someone that has had a few slipups resulting in overdrafts will have a much easier time getting their records cleansed than someone that passed multiple checks on an account that had been closed. However, the process of expunging a ChexSystems file can take longer than what many people are willing to wait – particularly if they are in need of a new checking bank account immediately.

Get a No ChexSystem Bank Account

Luckily, there are still financial institutions such as banks and credit unions that do not check ChexSystems’ records for checking account approval or offer “second chance” checking bank accounts even if they do. These banks and credit unions are a breath of fresh air to people that are shocked to learn that they have been included in a database that they never knew existed for infractions that they either never committed or committed years before and have since matured in handling their finances. Because ChexSystems keeps records for up to five years, simply waiting on the records to drop off is simply not an option for most people.

Open a New none Chex System bank Account

2nd chance checking bank accounts are – thankfully – becoming more abundant as time goes on. Many major (and smaller, as well) banks and credit unions have found that simply automatically denying everyone that has a negative ChexSystems file is actually counter-intuitive. While the banks are protecting themselves from habitual fraudsters, they are also turning away business from customers that have a few bad marks but have since learned from their mistakes. At the same time, there are a few opportunistic “fly-by-night” companies that are taking advantage of unsuspecting people that are trying to get a legitimate checking account in spite of their ChexSystems files. Many of these companies charge exorbitant and even predatory account maintenance and checking account fees.

How to Remove Your Name From Chexsystem Database

While it is estimated that 80% of all banks and credit unions use ChexSystems, obtaining a no ChexSystem bank account is possible, but consumers must be prepared to know what to look for. Instead of driving from bank to bank searching for one that does not utilize ChexSystems, consumers should find a reliable, up-to-date list of all the local institutions that may give them a chance with a new account. Additionally, consumers should always be mindful of any fees associated with their new accounts to ensure that they are not becoming a victim of a predatory banking institution.