Banking » Guides » How to Clean Up a ChexSystems Report
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How to Clean Up a ChexSystems Report

Cleaning up a ChexSystems report can boost your chances of getting approved for a new bank account. Here are the steps to take
Author: Lorraine Smithills
Lorraine Smithills

Writer, Contributor

Experience

Lorraine is a freelance finance writer with years of experience in the banking sector and after a successful career in one of the largest retail and commercial financial services providers. She has a passion for helping people with less financial confidence to get control of their money through budgeting, saving, and responsible credit practices.
Interest Rates Last Update: April 15, 2024
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Author: Lorraine Smithills
Lorraine Smithills

Writer, Contributor

Experience

Lorraine is a freelance finance writer with years of experience in the banking sector and after a successful career in one of the largest retail and commercial financial services providers. She has a passion for helping people with less financial confidence to get control of their money through budgeting, saving, and responsible credit practices.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

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Table Of Content

What Is ChexSystems?

ChexSystems is a consumer reporting agency that maintains records of consumers' banking and financial behaviors. It is used by banks and credit unions to assess the risk of opening new accounts for potential customers.

When you open a new bank account, the bank may check your banking history with ChexSystems to see if you have any negative marks on your record, such as a history of overdrafts or unpaid fees. If you have a negative mark on your ChexSystems record, it may be more difficult for you to open a new account at certain banks.

ChexSystems collects information such as overdrafts, bounced checks, and negative account balances from participating financial institutions. This information stays on your ChexSystems record for five years, although positive information can stay on for longer.

You are entitled to one free copy of your ChexSystems report per year, which you can request online, by phone, or by mail. If you find an error on your ChexSystems report, you can dispute it with ChexSystems.

Clean Up a ChexSystems Report In 4 Steps

If you have negative marks on your ChexSystems report, it can make it difficult to open a new bank account. However, there are steps you can take to clean up your report and improve your chances of being approved for a new account.

Here are the steps to clean your ChexSystems report:

1. Get A Copy Of Your Report

You are entitled to one free copy of your ChexSystems report per year.To obtain a copy of your ChexSystems report, you can visit the ChexSystems website, call their toll-free number, or request a copy by mail.

You will need to provide personal information such as your name, address, and Social Security number to verify your identity. Once you have verified your identity, ChexSystems will send you a copy of your report.

2. Review Your Report

Once you have your ChexSystems report, you should review it carefully to identify any errors or inaccuracies. Look for negative marks such as overdrafts, bounced checks, or unpaid fees. You should also check to see if there are any accounts or inquiries on your report that you do not recognize, as this could be a sign of identity theft.

Any inaccuracies or errors could be hurting your chances of opening a new bank account.

3. Dispute Errors

If you find any errors on your report, you can dispute them with ChexSystems. You can dispute errors online, by mail, or by phone. Be sure to provide any supporting documentation that proves the error is inaccurate.

4. Wait For Negative Marks To Expire

Negative marks on your ChexSystems report typically stay on your record for five years. If you have negative marks that are accurate, you may need to wait for them to expire before they are removed from your report.

While this can be frustrating, it's important to remember that time is on your side. As long as you maintain a positive banking history moving forward, the negative marks on your report will eventually become less significant.

In the meantime, focus on building a positive banking history by avoiding overdrafts, paying your bills on time, and being responsible with your finances.

clean up your ChexSystems report
clean up your ChexSystems report will improve your chances of being approved for a new bank account (Photo by NPFire/Shutterstock)

What Else Can You Do?

There are additional steps you can take to increase the chances of getting approval for a bank account, and managing your finance until this point:

If you have any outstanding balances or unpaid fees on your ChexSystems report, it's important to pay them off as soon as possible. This will not only help improve your ChexSystems report, but it will also show potential banks that you are responsible with your finances.

You can contact the bank or institution that reported the negative information to find out how much you owe and make arrangements to pay it off.

If you have a negative mark on your ChexSystems report that is accurate, you can try negotiating with the bank or institution that reported it. You can explain the circumstances that led to the negative mark and ask if they would be willing to remove it as a goodwill gesture.

For example, if you had a series of overdrafts due to a medical emergency, you could explain the situation to your bank. While there is no guarantee that they will agree to open an account, it's worth asking.

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If you're unable to open a traditional bank account, you can consider using a prepaid debit card instead.

These cards work like regular debit cards, but you load them with money ahead of time. They don't require a credit check, so they can be a good option for people with negative ChexSystems records.

If you already have an account and you want to improve your situation, the best way to improve your ChexSystems report is to build a positive banking history. This means avoiding overdrafts, paying your bills on time, and being responsible with your finances.

Over time, your positive banking history will outweigh any negative marks on your ChexSystems report, making it easier for you to open new accounts in the future.

A second-chance bank account can be a good solution for those who have a negative history.

If you already have an account and you want to improve your situation, the best way to improve your ChexSystems report is to build a positive banking history. This means avoiding overdrafts, paying your bills on time, and being responsible with your finances.

Over time, your positive banking history will outweigh any negative marks on your ChexSystems report, making it easier for you to open new accounts in the future.

Why Second-Chance Account Can Be Helpful?

A second-chance checking account can help improve your ChexSystems report in a few ways:

  • Establish a Positive Banking History: A second-chance checking account can help you establish a positive banking history. By using the account responsibly and avoiding any negative activity, such as overdrafts or unpaid fees, you can demonstrate to future banks and financial institutions that you are a responsible account holder. This can help offset any negative marks on your ChexSystems report.

  • Show Responsibility: Many banks and financial institutions are willing to overlook a negative ChexSystems report if you can show responsibility with your finances. With a second-chance checking account, you can demonstrate to these institutions that you are working to improve your financial standing.

  • Offer Lower Fees: Second-chance checking accounts may come with higher fees than traditional checking accounts, but they often have lower fees than other options, such as prepaid debit cards. By using a second-chance checking account, you may be able to avoid the high fees associated with some other types of accounts, which can help you improve your financial situation.

Overall, a second-chance checking account can be a valuable tool for improving your ChexSystems report.

ChexSystems Vs Credit Score: What's The Difference?

ChexSystems and credit score are two different systems used to evaluate a person's financial history and risk.

ChexSystems is a database of consumer banking behaviors, such as overdrafts, bounced checks, and unpaid fees. When you apply for a new bank account, the bank may check your ChexSystems report to see if you have a history of negative behavior that could make you a risky customer. The information on your ChexSystems report stays on your record for five years.

On the other hand, a credit score is a number that represents your creditworthiness based on your credit history. Your credit score is calculated using several factors, including your payment history, credit utilization, length of credit history, types of credit accounts, and new credit inquiries. Banks and other lenders use your credit score to assess your risk as a borrower when you apply for credit cards, loans, or other types of credit.

FAQs

If you find an error on your ChexSystems report, you can dispute it with ChexSystems. Be sure to provide any supporting documentation that proves the error is inaccurate

When comparing second-chance checking accounts, look for accounts with lower fees and more features, such as online banking, mobile banking, and bill pay.

If you have been the victim of identity theft, you should contact ChexSystems and the financial institutions involved to report the fraud and have the negative marks removed from your ChexSystems report.

No, you are entitled to one free copy of your ChexSystems report per year. If you need additional copies, you may be required to pay for it.

Picture of Lorraine Smithills

Lorraine Smithills

Lorraine is a freelance finance writer with years of experience in the banking sector and after a successful career in one of the largest retail and commercial financial services providers. She has a passion for helping people with less financial confidence to get control of their money through budgeting, saving, and responsible credit practices.
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