What IS ChexSystems?
ChexSystems is a consumer credit reporting agency which tracks the financial history of people, especially in regard to their banking history. It consists of a database in which the names, social security numbers, addresses, and state ID numbers are associated with bank accounts closed for various reasons.
ChexSystems is governed by the Fair Credit Reporting Act (FCRA) and other federal laws. It was originally just a database used by businesses in order to identify customers who routinely wrote bad checks, but was expanded over time to serve the banking industry instead.
Today, ChexSystems is owned by a company called eFunds Corporation, and is run for profit. Around 80 percent of the banks and credit unions in the U.S routinely use ChexSystems reporting when deciding whether or not to allow someone to open a checking or savings account, and report customers in cases of:
- Failure to settle debts
- Unpaid overdraft balances and/or fees
- Non-cleared deposited checks
- Non-sufficient funds (NSF)
Accounts that have been closed are often reported. In some cases, the wrong information is given by the reporting bank to ChexSystems. If this happens, the person whose name is now on record in their database can have difficulty getting a new bank account, even if the information is incorrect.
When you go to most banks or credit unions and apply for a checking account, the bank uses ChexSystems to obtain a report. ChexSystems won’t give a recommendation -they just provide “the facts” – but if a report is available, it is normally not a good sign. The bank may deny your application based on the information provided through the report – which may or may not be accurate.
Most people aren’t aware ChexSystems even exists until they are turned down for a checking account. When they find out there is a report on them in the system, they don’t know what to do or how to get removed from ChexSystems. Many turn to second chance banking, finding banks that don’t use ChexSystems and paying higher fees for less services in order to maintain check writing privileges.
CFS specializes in disputing ChexSystems legally, filing the correct documentation and finding inaccuracies in the reports. In many cases, the wrong information can be taken off ChexSystems, allowing you to regain control of your financial matters. Contact CFS today and regain control!