Trapped In Chexsystem and Cannot Open a Bank Account
ChexSystem, developed in the 1980’s, is a networked computer system that records a person’s poor credit history. 80 to 90% of banks subscribe to ChexSystem, use it to report someone who is a credit risk, and use its information to make decisions about customers.
Once a person is deemed a "credit risk" on ChexSystem, their name stays in the system for five years. It is estimated that anywhere from 7 to 19 million people are in the ChexSystem database.A similar system is maintained by Telechek, although it is not as widely used.
CRITERIA FOR A CUSTOMER BEING REFERRED TO CHEXSYSTEM
Overdrafts (bounced checks), abuse of bank services, or any fraudulent activity can result in being referred to ChexSystem. The time allotted for correcting an overdraft varies from bank to bank. Some banks report the problem after 30 days. The amount of the overdraft does not have to be substantial to be reported. Some banks report the problem for any overdraft over $35.
Suggestions:
The initial step in correcting the problem is to settle the financial problem that caused you to be in the system. Your name will still be in ChexSystem for five years, but this is a start.
Banks have varying leniency policies for people in the ChexSystem. Unfortunately, a majority of banks will not take a financial risk with someone in ChexSystem. There are, however, some factors that may help bank personnel see you are worth the risk. If you can make such a demonstration of strength, you need to present your situation to the branch manager. Branch managers will be reluctant to go out too far on a limb, but they do have some discretion.
A strong display of financial stability for 1 to 3 years may convince some banks that your risk factors have been reduced. Signs of financial stability include steady employment and paying rent/ utilities on time. A demonstration of financial stability may help you to open a bank account.
As an American citizen, you have the right to a report about the information ChexSystem has recorded about you. If you have been denied a checking account within the past 60 days, the report is free. After 60 days, a charge of $8 is attached.
The contact address for ChexSystems are the following:
Mail: ChexSystems Customer Service12005 Ford Road, Suite 600
Dallas, TX 75234-7253
Website:Be sure to check out any bank for stipulations that are financially extreme. The Better Business Bureau is a good place to start, http://www.bbb.org/BBBcomplaints/.
Once a person is deemed a "credit risk" on ChexSystem, their name stays in the system for five years. It is estimated that anywhere from 7 to 19 million people are in the ChexSystem database.A similar system is maintained by Telechek, although it is not as widely used.
CRITERIA FOR A CUSTOMER BEING REFERRED TO CHEXSYSTEM
Overdrafts (bounced checks), abuse of bank services, or any fraudulent activity can result in being referred to ChexSystem. The time allotted for correcting an overdraft varies from bank to bank. Some banks report the problem after 30 days. The amount of the overdraft does not have to be substantial to be reported. Some banks report the problem for any overdraft over $35.
Suggestions:
- Take care of bank problems immediately, no matter how small.
- Avoid overdrafts - it costs you extra money and causes problems.
- Help avoid overdrafts by knowing your bank balance.
The initial step in correcting the problem is to settle the financial problem that caused you to be in the system. Your name will still be in ChexSystem for five years, but this is a start.
Banks have varying leniency policies for people in the ChexSystem. Unfortunately, a majority of banks will not take a financial risk with someone in ChexSystem. There are, however, some factors that may help bank personnel see you are worth the risk. If you can make such a demonstration of strength, you need to present your situation to the branch manager. Branch managers will be reluctant to go out too far on a limb, but they do have some discretion.
A strong display of financial stability for 1 to 3 years may convince some banks that your risk factors have been reduced. Signs of financial stability include steady employment and paying rent/ utilities on time. A demonstration of financial stability may help you to open a bank account.
As an American citizen, you have the right to a report about the information ChexSystem has recorded about you. If you have been denied a checking account within the past 60 days, the report is free. After 60 days, a charge of $8 is attached.
The contact address for ChexSystems are the following:
Mail: ChexSystems Customer Service12005 Ford Road, Suite 600
Dallas, TX 75234-7253
Website:
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