A checking account is something essential that all people need to have to function properly within society. Checking accounts are necessary for purchases, storing funds, payment, deposits, direct deposit and even getting certain types of loans through other institutions. They are superior to savings accounts in that they have much more functionality than savings accounts were designed to have.
The bank may report an offense to Chexsystems when a consumer does something negative or loses a bank account for a reason such as a bounced check, overdraft, NSF fraud, months of carrying negative balance posts, or writing checks on a closed account. Having problems with overdraft services within a month of opening a bank account is not good either. The may be listed in the Chexsystems database for up to seven years per bank. Chexsystems usually removes the information after five years, but they have the right to allow it stay there for seven years. It is possible that they will if they do not receive payments.
What is Chexsystems?
Chexsystems is an agency that financial institutions primarily use for required verification and security purposes. They share bad experiences with checks, interest, capital and bank accounts. The company can also provide credit report information. The banks that use this service agency aren’t necessarily searching for a reasons to deny customers, but sometimes they must do so for integrity reasons. They take the provided information that they find in Chexsystems reports as advice for or against account approval. Sometimes, Chexsystems is like a credit check. The bank may have to cancel the application and may be unable to approve the account although the consumer truly wants it. The problem that the customer had will still be under the person’s head even though he or she said that it would not occur again.
How the Chexsystems Report Affects Your Credit
A bank must verify a customer’s identity before it will open a savings or checking account in that person’s name. For that reason, the bank will ask for identification and a social security number. They will run a Chexsystems report with that information. The report will display past information. The report will tell the prospective bank the name of the reporting institutions and the amount of money that owed. Chexsystems is a national reporting system, so it does not matter if the information got put on the report in an area that is in Maryland, Virginia, Alabama, Pennsylvania, Texas, Ohio, Illinois, Washington, DC or some other states. The bank will still find out every offense. The report will display the balance whether it is great or one of the least balances of all times.
A negative Chexsystems report tarnishes a reputation with institutions and will cause a person trouble getting approved for accounts. A majority of financial institutions are in the same network, and they all use Chexsystems to examine account applicants before they grant them bank accounts. A negative report will cause a customer to receive a denial for a checking or savings account. That person will then have no place to put his or her money other than in between the mattress, which is not a good idea. Student loans may be denied, as well. It is ever so important for a banking customer to keep everything positive by paying bills on time, having enough money in the account to combat accidental overdraft fees, and paying back any negative balance that may come to the account for any reason.
Guide: Have Negative History Removed From the Chexsystems Records
Naturally, the best way to get off the Chexsystems report is to pay the balance that the system reports. It would be best to ask for a copy of the report and then contact the bank that has the issue directly. Some people use third-party companies to resolve the issues, but that does not always work. If a debtor can pay the bank directly, that would be best.
The next alternative is to contact Chexsystems and dispute a report that one does not feel is valid. Chexsystems has a convenient online dispute tool that a consumer can use to start a dispute. Just like other credit reporting agencies, Chexsystems has to conduct a dispute and give an answer within 30 days. The person must submit documents that indicate age and identity as well as documents that support the dispute.
The company will close Chexsystem accounts if it finds that its report is in error. The individual can also dispute Chexsystems information by mail, email or fax. The dispute must include information such as the mailing address, social security number, full name, consumer ID and information that pertains to the dispute. Finally, a person can contact a third-party such as a lawyer or a credit repair company to help the consumer get the information removed from the report. Chexsytems will be willing to remove accounts that are not related, have bogus amounts or are found to be too vague for the consumer to bear the burden. Chexsystems will have no choice but to update the information and provide the consumer with a report.
Alternatives: Banking Options and Tips for a Negative Chexsystems Customer
A person who has a negative report may want to use some alternative banking methods. One of the methods that one can use is to use a Visa credit card, credit cards or prepaid debit cards. A prepaid debit card can hold a certain amount of money for a person who does not have a bank account. Prepaid cards are good for people with poor banking reputations, but a debit card should not be one’s sole source of funding. They have fees just like bank accounts have when it comes down to it. Some debit cards have monthly fees, and other debit cards charge a fee for each transaction the person does. A person can find a number of free offers by searching a comparison site for a list.
A second chance or chance checking bank is a bank that knows about problems with bank accounts and chooses to approve them anyway. A consumer can apply for a chance checking account by following a link that leads to applications for second chance checking accounts. The last alternative is to use a non-Chexsystems bank. PNC Bank, Discover, Wells Fargo, TD and Regions are examples of some banks that offer second chance accounts.
Why Keeping a Bank Account Is Best
Keeping a bank account and getting one’s reputation right with Chexsystems is the best way to live. The consumer can then conduct business without having to worry about being denied access to loans, ATM card access, ATMs, mortgage accounts and other things.
Nonchexsystems Banks and Credit Union Options
Many nonchexsystems bank account and unions for credit exist for people who want to have a second chance. A consumer can find a few of these banks by searching a database. One of the large banks that does not use Chexsystems is SunTrust in Florida, Georgia, the Carolinas and more. Chester National Bank in Missouri does not use Chexsystems either. Some additional examples of banks and credit unions that do not use Chexsystems are as follows:
- First Federal Credit Union- Chareleston, SC
- SC Telco Federal Credit Union- Greenville, SC
- Columbus State Bank-Columbus, TX
- Frost Bank- Keller, TX
Many more banks and credit unions exist that are compassionate or do not use Chexsystems. They will come up during an easy search for minimum deposit options. It is up to the interested person to do his or her due diligence and find a suitable establishment in the area. The consumer must be sure to conduct website research and examine what all the branches where he or she lives are offering. The consumer should then choose the best option from those.
All consumers should own bank accounts. However, they should pay their outstanding debt, as well. A person should use the alternative methods only if it is an emergency and a last resort that they start looking here and obtain a bank account before they handle their business with Chexsystems. The application process for a local second chance checking account or a non-Chexystems account is exactly the same as it is for any other bank. The person has to visit and supply the bank with identification that provides his or her age and identity. The person must also provide proof of residence. The bank will ask questions, do its necessary procedural thing, and then let the consumer know his or her status for the personal account. It will add the account if the answer is positive. The customer will hear the information and try to conduct himself or herself accordingly and never go below standard and get reported again. The Chexsystems record should make the person think about trying to change to avoid negative credit report information. To avoid getting on Chex, the consumer should avoid things that might have well landed him or her there a long time ago. Creditors give thanks to consumers who stay out of trouble.
Advice for Restoring One’s Reputation
- Act like a student and please record a comment or any information that an article or articles provides about staying on top.
- Instead of saying “I know it all,” pay the unpaid balance and don’t leave them. Your credit score will reflect your actions.
- Don’t apply at Chexsystems banks even if someone tells you to. Don’t let anyone who cannot approve your app for personal loans give you advice on on what you should read or send. Unless that person is a banker, cancel your reply.
- Read the branch loan policy no matter what another person says.
- Don’t follow previous mistakes since they didn’t work. Take a chance. Be different.
- Ask everyone to show you a monthly second chance checking statement and records on any post that you gave.
- Listen to comments and advice. They play a major part in your success.
- Show that you are able to be responsible even in difficult times.
- Ask for info on paid features, free features and regular products.
- Track the banking news every week at the very minimum.
If you do all this, then you are probably on the way to restoring your reputation. You are going to be glad later that you went and answered when you were called, and you made your hard financial life better.