Nobody likes being in the position to have their applications for a new checking account
rejected. Yet that's the prospect you face if your information has been forwarded to ChexSystems by
one or more banks that you've done business with in the past. Having a ChexSystems record has
become synonymous with having lots and lots of trouble opening a new checking account.
What Is ChexSystems
ChexSystems is a database that keeps records of people who have, in one way or another, had
negative incidents show up in their banking history. In other words, it's sort of a risk-scoring
tool used by banks and other financial institutions. It's similar to the FICO scoring system in
that it's a decision-making tool for the financial institutions, but it differs from it in that it
doesn't actually have a score. All you need to be financially crippled is to have your information
(name, social security number) reported to them. Most banks will just refuse to open new checking
accounts for you, period.
How You Can Get Reported To ChexSystems
There are many ways you can end up on the Chexsystems database. They include, but are not
limited to:
- Showing yourself to be what is considered a banking risk. You can do so by having repeated
overdrafts on your checking account or by abusing the overdraft feature on your debit
card.
- Engaging in writing bad checks and/or committing other types of check fraud.
- Having unpaid overdraft balances at one or more banking institutions that you used to do
business with.
If you get rejected every time you apply for a new checking account, it's pretty normal to feel
very frustrated: not being able to get a new checking account can really put a cramp in your
financial life. And this is an agency that's notorious for NOT being customer friendly. After all,
its clients are the financial institutions, not the individuals that are being reported.
So while you're working on getting your name removed from the database, you don't have to put
your financial life on hold. You can find a bank that either does not use Chexsystems at all, or
who doesn't rely solely on that information to decide whether or not to open an account for
you.
How to Find Non-ChexSystems Banks
- Look for banks that bill themselves as "second chance checking" banks.
- Choose one that has ATM machines installed all over the country - or at least in the states
in which you travel.
- Create a list of at least 5-7 candidate banks before deciding upon which one(s) you will
approach for a new account.
- Your candidate list should include a record of the most important features of any bank
account, including fee structures, special offers, and terms and conditions.
- Make sure they are insured by the FDIC.
- When you do get approved for your new checking account, be sure to read the fine print
before signing on the dotted line.
There are a lot of banks which offer the second chance checking accounts, be they online banks
or local banking institutions. Cutting through the banking clutter requires that you rise above the
politics of banking today. Find a second chance checking bank and get the peace of mind in knowing
that they will not reject your application.
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