Everyone's made mistakes when it comes to money. Sometimes, financial issues can even arise due to no fault of your own. This can put your bank account at risk of being closed and even make it difficult to open new accounts in the future. If you've experienced trouble with your bank account in the past, there's a chance it could've been reported to ChexSystems. Here's what that means for you.
What is ChexSystems?
ChexSystems is an agency that gathers information about closed bank accounts throughout the United States. Specifically, they collect data about savings and checking accounts that have been closed as a result of unpaid negative balances, account and ATM abuse, returned or "bounced" checks, and fraudulent activity. Not only will financial institutions close accounts due to issues like these, but many will also report these accounts to ChexSystems. ChexSystems typically keeps reported information on record for five years from the report date.
How does ChexSystems affect me?
If you apply for a bank account, it's possible that the financial institution you're applying with will check to see if you have an unfavorable account history on ChexSystems. Depending on what they find, you may or may not be approved for an account.
Your ChexSystems history does not affect your credit score. This is because ChexSystems is focused on deposit accounts (savings and checking accounts) and not loans or lines of credit.
How can I know if I've been reported to ChexSystems?
Some may be unaware they've been reported to ChexSystems until they try opening a new bank account. The good news is that you can find out beforehand by reviewing your consumer disclosure report. You can request a copy of this report at ChexSystems.com.
I want to open a new account, but I have a ChexSystems record. What now?
Although a ChexSystems record may prevent you from opening a regular bank account, some financial institutions may allow you to open a type of second-chance account. At Cyprus Credit Union, for example, those with ChexSystems records can apply for a Fresh Start Checking account.* Alternatively, some institutions may allow you to have a prepaid, reloadable debit card that allows you to spend without a bank account.**
Additional Resources
For more information about ChexSystems, visit ChexSystems.com. Here, you can learn more about your consumer rights and dispute information on your report which you believe is inaccurate or no longer relevant.
*Certain conditions and restrictions apply. More information available here.
**Prepaid debit cards are not currently offered by Cyprus Credit Union.
The information in this article is for educational purposes only and is correct as of its publish date.
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