Finance 101: How To Open A Checking Account When You Are In ChexSystems

In life, when you are hitting an unseen obstacle as you try to reach your goals, it can be a very frustrating feeling. After all, life’s challenges are much easier to take on when you fully understand what you are up against.

That is why people who have been rejected time and again for a new checking account can start to feel a bit helpless. Many falsely believe that their credit (FICO) score is to blame, and they do not understand that the most likely reason for their rejection is due to something called ChexSystems.

ChexSystems is a database that was created by a company called eFunds to help banks manage their level of risk in taking on new checking account customers. The ChexSystems database allows banks to report customers whom the banks believe are risky customers due to those customers’ past banking behaviors. Of course, those same participating banks also refer to this database when reviewing customer applications.  If the person’s name shows up, the application is often rejected.

So, what can you do if you are on this special database but need to get a new checking account? If you are saying, “I want to open a checking account but I am on ChexSystems,” here are 5 tips for getting an account:

  1. You have little control over your name showing up in the database:
    If you like, you can inquire with ChexSystems and ask them to generate a Consumer Report for you. This will allow you to review your record as it appears in ChexSystems. Note, however, that doing so will likely be no help in getting your name removed. Bottom line: those same banks will likely continue to reject your application for the foreseeable future.
  2. You can and should report any errors that caused your name to show up there.
    If you do run your report, be sure to report to ChexSystems any errors that may be keeping your name in the database. This is the one way that you can possibly get your name removed from the system. Still, removal remains unlikely.  I have listed ChexSystems’ contact information below:Mail:
    Chex Systems, Inc.
    Attn:  Consumer Relations
    7805 Hudson Road, Suite 100
    Woodbury, MN 55125

    Fax: 602.659.2197
    Telephone: 800.428.9623
  3. Your best bet is to find a second chance checking bank:
    Rather than spending your time trying to get your name removed from this banker’s database, your time may be better rewarded in looking for a second chance checking bank. These are the banks who promise not to refer to ChexSystems when considering your application for a new checking account.
  4. Compare multiple second chance checking banks to find the right one for you:
    As you shop for a second chance checking bank, be sure to compare the offerings of multiple banks. Each bank offers different benefits and features. Also, make sure that your bank is FDIC-insured.
  5. Apply for a new checking account:
    Given your past rejections, you may be hesitant to apply for a new account. Don’t be: second chance checking banks are almost certain to approve your account application, despite other factors such as your ChexSystems status or your credit score.

It’s important to note that Chexsystems is governed by the Federal Fair Credit Reporting Act. You have the same rights concerning the information collected and stored there as you do with Experian, Equifax and Trans Union. Follow these 5 tips in order to increase your chances of getting a new checking account.  Your other option is to work completely on a cash and money order system.

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