Introduction: Chexsystem Removal and Chexsystems Dispute


Having the ability to open a bank account is one of the most basic and necessary financial needs in our society.

Unless you plan on keeping large stashes of money underneath your pillow or hidden in the walls of your home, a bank account is the easiest way to manage your money.

But what would you do if you went to open a bank account and the bank employee told you that you had been blacklisted by Chexsystems, meaning that you wouldn’t be accepted for a bank account?

Chexsystems is a consumer reporting agency (CRA) that reports to major banks and financial institutions regarding the negative banking transgressions that you have committed.

Without getting a Chexsystem removal, many banks may deny you a bank account based on your Chexsystems report. If you feel that you have a Chexsystems dispute, the first thing you need to do is learn what is Chexsystems and how it works.

Chexsystem Removal and Chexsystems Dispute

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In this brief article, AdvisoryHQ will offer a complete review of how Chexsystems works. We will begin by explaining what Chexsystems is before clarifying how you can find out your Chexsystems score. Next, we will look at how long you stay in Chexsystems once you receive a negative Chexsystems report. 

For people who have an ongoing Chexsystems dispute that hasn’t been resolved, we will also look at whether it is possible for you to open a checking account without Chexsystems and whether credit unions use Chexsystems.

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What Is Chexsystems?

No bank enjoys dealing with a client who repeatedly bounces their checks, overdrafts from their account, or repeatedly exceeds transfer limits. For that reason, most banks will do a quick background check with Chexsystems or some other consumer reporting agency before accepting new clients who are trying to open a bank account.

Anyone in the United States who has opened up a bank account most likely has a Chexsystems report on file. Furthermore, it is estimated that close to 80% of all banks use Chexsystems as part of their screening process for new clients. Besides banks, other merchants may also use Chexsystems when customers write checks so they can turn down a check if negative Chexsystems dispute or low Chexsystems score comes up.

Banks also rely on Chexsytems report to identify people who engage in illegal activities such as a bank fraud or check fraud. If you have provided false information on a previous application for a bank account or tried to pass a check that wasn’t yours, your Chexsystems score will show those faults, and chances are that you won’t be eligible for opening up a new bank account.



Luckily, your Chexsystems score or Chexsystems report doesn’t affect your credit score. Chexsystems won’t report any banking transgression or Chexsystem dispute to the credit bureaus, so even if the bank won’t accept you for a new bank account, you still might be eligible for a loan if your credit is decent.

It can be frustrating when a merchant won’t accept your check or a bank won’t let you open a new account when you’ve moved to a new town. When this happens and people find out what Chexsystems is, their first reaction is usually to search for how to do a Chexsystem removal to get their name out of the system.

Unfortunately, doing a Chexsystem removal is not easy, and any Chexsystems dispute can take months and even years to resolve. Though we will briefly look at how you can go about fighting for a Chexsystem removal, it is far more important to understand what is Chexsystems and how it works.  Below, we offer a table of what Chexsystems reports on and how long each Chexystems dispute remains on record.

Financial Transgression

Examples

How Long You Stay in Chexsystems for this Transgression

Involuntary account closureThe bank closes your account against your wishes for irresponsible account use5 years or less if you do a Chexsystems dispute
Writing too many bounced checksOne bounced check won’t affect you, but several can5 years or less if you do a Chexsystems dispute
Abuse of ATM machines or debit card useExceeding transfer limits and other dishonest behavior5 years or less if you do a Chexsystems dispute
Fraudulent checksIf a merchant reports a check you have written as fraudulent to a collection agency5 years or less if you do a Chexsystems dispute
Identity theftPutting incorrect information on a bank account application or being caught altering information on a check5 years or less if you do a Chexsystems dispute
Lost checks or repeated ordering of checksIf your bank suspects that your frequent report of “lost” checks might be fraudulent, they can also report you to Chexsystems5 years or less if you do a Chexsystems dispute
Frequent applications to multiple bank accountsThough this is routine reporting, Chexsystems might throw up a red flag if you have applied to several bank accounts within the last three months5 years of less if you do a Chexsystems dispute

Table: Chexsystem Removal and Chexsystems Dispute

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Can I Find Out My Chexsystems Score?

Once people understand what their Chexsystems report is and have given up on trying to achieve a Chexsystem removal, they usually want to find out how to find out their Chexsystems score.

Your Chexsystems score is actually calculated as a QualiFile Consumer Score, which is a number that is somewhere between 10o and 899. Like your credit score number, the higher your Chexsystems number, the better. 

Because of the Fair Credit Reporting Act, as a consumer, you are entitled to a free copy of your Chexsystems report, which will include your current Chexsystems score. You are eligible to get a free report once a year or anytime a bank has denied you a bank account within the past two months.



To retrieve your free Chexsystems report, you can:

  1. Create an online request form. You find that form here.
  2. Call the following automated toll-free number and follow the instructions: 800-428-9623
  3. Print an order form on the Chexsystems website and mail in the completed form to the following address: Chex Systems, Inc.  Attn: Consumer Relations, 7805 Hudson Rd., Ste. 100, Woodbury, MN 55125

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How Long Do You Stay in Chexsystems?

Sometimes, writing a few bad checks is simply unavoidable. If you have been living paycheck to paycheck and have not had the best of luck getting a decent loan, you might find that your checks have been bouncing almost on a weekly basis and your Chexsystems report will suffer because of that.

One thing that almost everyone wants to know is: How long do you stay in Chexsystems? As noted in the above table, all of the transgressions that get reported to Chexsystems stay in the system for a minimum of five years. If you feel that you have been unfairly reported on, you can contact Chexsystems and plead your case for a Chexsystem removal of certain reported information.

For example, if someone had gotten hold of your checkbook without you knowing and had written several checks fraudulently, causing those checks to bounce, you might be able to lobby for a Chexsystem removal if you can prove to Chexsystems that you weren’t involved in the fraudulent behavior.

If you feel that you have been unfairly reported on and have a negative Chexsystems report that doesn’t accurately reflect your financial behavior, you can file for a Chexsystem removal.

To be successful in getting a Chexsystem removal, it is important to report your case both to Chexsystems and to the bank that reported you. You can find that information in your Chexsystems report.

Once you discover how long you stay in Chexsystems, you can decide whether it is in your best interest to fight for a Chexsystem removal or not.



Is It Possible to Open a Checking Account Without Chexsystems?

If you have a low Chexsystems score because of repeated financial transgressions, you might want to find out if you can open a checking account without Chexsystems. As noted above, close to 80% of all banks use Chexsystems as part of their screening process.

Nonetheless, many banks do offer what are called “second chance checking accounts.” These accounts are specifically designed for people who have a low Chexsystems score or whose Chexsystems report doesn’t allow them to apply for a regular bank account.

With this type of account, you can open a checking account without Chexsystems, but you will also be required to pay several types of monthly fees. If you manage a clean account after a trial period of a year or two, however, chances are that the bank will develop trust in you and wipe out some of those fees.

Another option for people who are looking for ways to open a checking account without Chexsystems is to opt for a prepaid debit card. Most every bank offers some sort of prepaid debit card, and this allows you to manage your money without having to carry around large amounts of cash.

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Do Credit Unions Use Chexsystems?

If you haven’t had much luck opening a bank account due to a problematic Chexsystems report, you might be wondering, “Do credit unions use Chexsystems?” Since credit unions are usually more community oriented, they can operated with more leniency than big banks.

chexsystems report

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Many credit unions might simply not use Chexsystems. Furthermore, they might only review your Chexsystems report for certain types of financial transactions or accounts that you want to open.

Also, credit unions might be able to override your negative Chexsystems score and grant you special account privileges depending on your specific situation. Whereas you might find that you are talking to a wall if you try to explain your recent financial troubles to a large bank, a credit union manager might be more willing to listen to your specific situation and grant you a second chance.

For example, if you had recently experienced difficult financial times due to unexpected medical bills, you might have bounced several checks, making your Chexsystems report suffer. By explaining that situation to a credit union manager and showing how your financial situation has since stabilized, you might very well be able to convince him or her to grant you an account despite your Chexsystems dispute.

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Conclusion – A Complete Guide to Chexsytem Removal, Chexystems Disputes, and Chexsystems Reports

Having a negative Chexsystems report or a low Chexsystems score can cause you a whole host of financial difficulties. There is nothing more embarrassing than a cashier telling you that she can’t accept your check while a line of impatient customers waits behind you.

Learning what is Chexsystems and how it works is the first step toward helping you maintain a clean financial record. If you feel that you have been wrongly reported on, you can file a Chexsystems dispute and try to get a Chexsystem removal as well.

If there is no probability of improving your Chexsystems score in the short term, however, there are other options out there for you. Checking out your local credit union or applying for a short-term second chance checking account might very well help get you through a tough economic time.



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