If you have a ChexSystems record, it can be challenging to open a new bank account, hampering your financial independence.
A ChexSystems record can make it challenging to open up an account with a traditional bank making everyday activities that require a transaction with financial institutions. The good news is, there are steps you can take to remove your ChexSystems record.
We’ve created this guide with tips on how to remove your ChexSystems record. If you happen to have a negative item in the ChexSystems database, it will stay on your record for 5 years. But not all hope is lost; these tips will improve your chances of being removed from ChexSystems.
What is ChexSystems?
Simply put, ChexSystems is a company that tracks your banking history. They keep track of your banking history and any mistakes you might have made in the past. Essentially, they act as a credit bureau for banks and credit unions.
When it comes to bank accounts, the social security number often identifies a customer. Banks contribute data about their customers’ health and activity levels for ChexSystems -a company that provides this information- can determine whether they should be reported as “Problem Account” or not.
If you’ve made any of these mistakes, a potential traditional bank might contact you and tell you that you’re not allowed to open a checking account with them. This is because they might use ChexSystems to screen their potential customers.
Along with your personal information, some items that that you’ll find on your ChexSystems file include:
- Any Fraud
- Too many transfers or withdrawals
- Excessive returned check (NSF) charges
- Unpaid fees
- Unpaid Negative accounts
- Inquiries from other banks
The list of reasons that banks report their customers to ChexSystems is extensive, but the above represent some common ones.
Request your ChexSystems Report
The first step in ChexSystems removal is to request your ChexSystems report. This will allow you to see the information that ChexSystems has on you.
Federal law (Federal Fair Credit Reporting Act) allows for one free copy of your ChexSystems report every year. You can request a copy of your report by mail or online.
To request your ChexSystems report a few ways:
- Online: Visit the ChexSystems website and enter your information in the Consumer Disclosure Page. You can submit the form online or mail the form to Chex Systems Inc., Attn: Consumer Relations, 7805 Hudson Road, Suite 100, Woodbury, MN, 55125.
- Call: 1-800-428-9623
Include your full name, social security number, date of birth, and state of residence when calling or filling out the form online.
Review and Dispute ChexSystems Item
After you have your free copy of your report, the next step is to review the information and dispute any inaccurate or incomplete information.
You have the right to dispute any inaccurate, incomplete, or unverifiable information on your ChexSystems report.
To dispute an item on your ChexSystems report, you will need to provide ChexSystems with documentation that supports your dispute. The following are some items you can use to dispute an item on your ChexSystems report:
- Documentation that the account was paid
- Documentation that the account was closed by the bank
- Documentation that the account was charged off
- Documentation that the account was a victim of identity theft
- Documentation that the account was opened fraudulently
If you do not have the documentation to dispute an item on your ChexSystems report, ChexSystems might be able to help you get the documentation.
In most cases, ChexSystems will require you to provide a written statement disputing the information.
Send ChexSystems your Dispute
After gathering all of the necessary documentation, you can send your ChexSystems dispute.
You can send your dispute online, by mail, or by phone.
- Online: By visiting the Dispute Information section on ChexSystems, you can begin your process of disputing and submitting your claim.
- Mail: You can also mail your dispute letter using the same link and print it out, then mail them.
Once you’ve submitted your dispute, you can also send a dispute with the financial institution that reported the negative mark. Again, you’ll want to properly document the dispute and can use this sample letter to help you get started.
Paying off the Debt
If the debt reported on your ChexSystems report is accurate, it’s a good idea to pay off the outstanding debt as it can improve your chances of a ChexSystems removal.
When you pay off the unpaid debt, make sure to get a letter from the creditor stating that the debt has been paid in full. This letter can be used to dispute any inaccurate information on your ChexSystems report.
If you can pay off your debt as a way to negotiate a ChexSystem removal, you should consider doing it.
Speak to the Bank Directly
If you have had a negative listing with the bank that reported you to ChexSystems, you might want to speak to them directly.
Many banks will work with you if you have had a negative experience and ChexSystems is reporting inaccurate information. You can also ask the bank to contact ChexSystems and request that the information be updated or removed from your ChexSystems report.
If you have a debt owed, working with the bank to pay the debt off can help with ChexSystems removal.
Wait it Out
If you cannot successfully dispute the information on your ChexSystems report, you might have to wait it out.
ChexSystems is required by law to keep negative information on your ChexSystems report for five years. However, if you work to improve your ChexSystems rating, you can be removed from ChexSystems sooner.
Consider a Second Chance Bank Account
If you have had negative ChexSystems report with a bank and were unsuccessful on getting it removed, you might be a good candidate for second chance accounts.
Many banks offer second chance checking accounts, and they are designed for people who have had ChexSystems problems in the past.
The benefits of a second chance bank account include:
- No ChexSystems check
- Low or no initial deposit
- No minimum balance requirements
- Online and Mobile Banking
If you are looking for a new account that does not require a ChexSystems check, a second chance bank account might be the right option for you.
What is Second Chance Banking?
Second Chance Bank accounts, also known as “Bad Credit History Checking”, is a financial service provided by banks or credit unions who work together to provide financial products (checking and savings accounts) for people with previous bad debts.
These accounts allow you to take advantage of direct deposit and online bill pay options like regular checking accounts. If you are starting out with building your credit, this is an excellent account to help you establish yourself as someone who can be trusted with finances.
These checking accounts are called “Second Chance” Checking Accounts because they give people an opportunity to rebuild their credit.
These checking accounts do not come without their downsides, however.
It’s important to remember that some Second Chance Checking comes with the possibility of high fees and low-interest rates, so it is essential to weigh out all your options before choosing one.
To avoid these fees, we’ve compiled a list of the best banks that don’t use ChexSystems that have low or no fees.
Wrapping It Up
There are a few things that you can do to try and remove your ChexSystems record. The first is to dispute the information on your report. You can use this sample letter to help get started.
Second, you might want to consider speaking to the original bank directly if you have had negative experiences in the past. Many banks will work with you if you have had a negative experience and ChexSystems is reporting inaccurate information.
You can also ask the bank to contact ChexSystems and request that the information be updated or removed from your ChexSystems report.
If you cannot successfully dispute the information on your ChexSystems report, you might have to wait it out. ChexSystems is required by law to keep negative information on your ChexSystems report for five years.
However, if you work to improve your ChexSystems rating, you can be removed from ChexSystems sooner.
If none of these options are viable for you, you might want to consider opening a second chance bank account.
Many banks offer a second chance bank account and they are designed for people who have had ChexSystems problems in the past.
If you have a negative banking history, a second chance bank account benefits include no ChexSystems check, low or no initial deposit, no minimum balance requirements, online and mobile banking.
