Getting a Non-ChexSystems Account

ChexSystems can Make it Very Hard to Open A New Bank Account

Jul 14, 2009 John Wu

Getting a non-ChexSystems account is the next move for anyone who has the misfortune of being listed. Many banks won't take customers with a ChexSystems record.

ChexSystems is a consumer reporting agency for bank checking and savings accounts in the United States. According to bankrate.com, 80% of financial institutions use ChexSystems before opening an account. Almost all of those institutions will refuse to open a new account if a negative report is returned. Typical activities that cause a derogatory report include bounced checks, overdrafts, NSF (non sufficient funds) activity, unpaid debts such as fees owed to banks, and fraud.

Because ChexSystems is considered a consumer reporting agency, it is subject to the Fair Credit Reporting Act which requires a free report to be given to the consumer every year. The free report should be requested to verify whether a consumer has a negative report or not. If so, the consumer should only go to non-ChexSystems banks in order to save time and hassle from denials.

Online Banks

Most online banks are non-ChexSystems institutions. These accounts have real checks and ATM debit cards just like brick and mortar banks. Deposits are done electronically or through the mail. Before opening an account at an online bank, make sure the account is insured by the FDIC (Federal Deposit Insurance Corporation). Otherwise, the online bank may be a scam. The FDIC provides a tool to verify whether or not a bank is FDIC insured.

Second Chance Checking Accounts

Some banks may have second chance checking accounts for those who have a ChexSystems record or those with credit problems. The features are generally the same as regular accounts except that there may be a restriction or two, such as no checks or a low ATM limit. In addition, there may be higher fees associated with a second chance checking account versus a regular account. Finally, a larger than usual deposit may be required simply to open an account. It is important to read the fine print before signing up for a second chance checking account.

Credit Unions

Some credit unions do not use ChexSystems, or have second chance checking accounts for those who have past issues with their previous accounts. Credit union accounts have the same features as banks such as online billpay, ATM debit cards, checks, and a branch network for doing business. It is best to call or check the credit union website to make sure the credit union does not use ChexSystems before applying for an account.

Although the vast majority of financial institutions will refuse to open an account for any customer who has a negative ChexSystems record, around 20% of banks and credit unions will still open an account. All that's needed are few phone calls or visits to bank websites to find a non-ChexSystems bank that will open an account.

Readers interested in this topic are also often interested in reading about late credit card payments and late mortgage payments.

Reference:

BankRate.com - "ChexSystems"

The copyright of the article Getting a Non-ChexSystems Account in Personal Budgeting/Finance is owned by John Wu. Permission to republish Getting a Non-ChexSystems Account in print or online must be granted by the author in writing.

Get a Checking Account Without ChexSystems	Check From a Non ChexSystems Checking Account	From a Bank That Does Not Use ChexSystems
Check From a Non-Chexsystems Bank	Second Chance Checking Account