What is ChexSystems?

ChexSystems Inc. is a CRA (consumer reporting agency) that maintains records of people who have defaulted or become delinquent on their bank account. A person may be reported to ChexSystems if they have abused their account, committed fraud, have excessive NSFs, or overdrawn on their account for an extended period of time (e.g. 30 days). Once someone is reported to ChexSystems, their record will remain in the ChexSystem’s database for 5 years.

What does ChexSystems do?
When a member bank or financial institution requests the report of a potential customer, ChexSystems will provide the bank with a ChexSystems report that details the negative report. Only negative banking histories are kept on file by ChexSystems, so if you haven’t been reported to ChexSystems, your record will not show up. Not having a ChexSystems record is a good thing.

There are only two ways that you can clear your name from ChexSystems:

1. Speak to the branch manager of the reporting bank to see if he/she would be willing to have your record removed for you.
2. File a dispute with ChexSystems. ChexSystems will only remove your record if it contains inaccuracies or unverifiable information. In most cases, ChexSystems will have correct information about you, so the odds are stacked against you.

If you can’t clear your name using one of the 2 methods above, then you’re pretty much stuck with ChexSystems for the entire 5 years. But don’t despair, there are still banking options that work regardless of a ChexSystems record. 

Here are 3 practical and easy solutions to ChexSystems:

1. Look for a bank that doesn’t use ChexSystems, or
2. Look for a bank that offers second chance bank account, or
3. Apply for a prepaid debit card