You might have heard of anyone not being able to open a checking account at a bank or any credit union due to a ChexSystems report dispute.
ChexSystems is one of the national consumer reporting agencies in the USA. Almost 80% of banks in the USA are affiliated with ChexSystems. Whenever there is a negative account balance, unpaid fees, bounced banks, or any other problems with your bank account, the bank reports it to ChexSystems immediately.
So next time when you open a checking or savings account with any other bank or credit union, the very first thing they do is request your ChexSystems report to see your bank history. If there is any negative information or record in your report, you are denied of the account.
Before you experience it yourself, make sure you know what a ChexSystems report is, how it works, how to avoid ChexSystems dispute and if you already have one, how to get out of it. The following guide has all you need to know about ChexSystems report.
What is ChexSystems Report?
A ChexSystems report is a draft created by ChexSystems for every account holder at ChexSystems affiliated banks around the country. This report includes complete information regarding your negative banking history.
Whatever goes wrong with your banking transactions, balances, due payments, and related financial obligations, it gets enlisted in your ChexSystems report with complete details. You need to note here that an entry is made in your ChexSystems report only when it is verified by ChexSystems itself.
How to Get Your ChexSystems Report?
There are various ways to get your ChexSystems report. You can request your ChexSystems report for free every year as permitted by the Fair Credit Reporting Act (FCRA). It allows you to check which negative information in your ChexSystems report is stopping you from carrying out banking activities.
Along with a ChexSystems report, you can also request your ChexSystems Consumer Score. It usually ranges from 100 to 899 and acts as a numerical representation of your ChexSystems report. Keep in mind that while ChexSystems report comes free once every 12 months, you might have to pay for your ChexSystems Consumer Score. Account holders with higher ChexSystems Consumer Score are considered as low-risk clients by banks and credit unions.
Even when you think that you would not have any ChexSystems record error, it is still good to see for errors once a year. It allows you to take any action beforehand so you do not have to face problems later on. Also, you might get to know of any identity theft or fraudulent activity being conducted in your name.
There are three ways to obtain your ChexSystems report:
You can simply go to ChexSystems official website and fill out the consumer disclosure form. You need to take the following steps:
- Agree to the terms and conditions.
- Tell if you were denied a checking or savings account in the past 60 days and if ChexSystems was the reason behind that.
- Verify that you are 18 years or older.
- Fill out your personal information such as your name, date of birth, current address, social security number (SSN) and previous address if any.
- Enter the security code and submit the request.
Within 5 business days, you get your ChexSystems report by mail.
2. Over Phone
In order to request for ChexSystems over phone, simply dial 800-428-9623 and file a request through an automated process.
3. Through Mail or Fax
You can also request a ChexSystems report through mail or fax. All you have to do is fill out request form, get it printed and mail it to this address:
Attn: Customer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Or else, you can fax it here: 602-659-2197
How Long Does It Take to Get a ChexSystems Report?
When you request your report online, ChexSystems send it by email within 5 days. But when you request it in the printed form through phone, mail or fax, ChexSystems sends the report through USPS within 15 business days.
What is Included in ChexSystems Report?
ChexSystems include various sections that come with different pieces of information regarding your personal information, banking history (reported by the bank), institutions/organizations who requested for your ChexSystems report and all the inquiries made.
Section 1. Personal Information
Your personal information includes:
- Your name
- Current address
- Previous address (if any)
- Phone numbers
- Email address
- Date of birth
Section 2. Reported Information
Section 2 includes all reported information by ChexSystems listed financial institutions made regarding any checking or savings account negative activity against you. There might be single or multiple entries made on the basis of the reported information.
Each entry comes with the following:
- Source of information
- Phone number of the source
- Reported for
- Reported name
- Reported address
- Reported SSN/ID
- Driver’s license
- Date reported
- RTN/Acct #
- Original charge off amount
- Closure status
- Closure date
This gives you the complete information of who reported such information against you as well as why the case was reported and when. This helps you track the information to the source.
Section 3. Inquiries Viewed By Others
This section includes information regarding someone accessing your ChexSystems information as a result of any business transaction between you and the company. All such inquiries made are enlisted with the following information:
- Phone number
- Inquiry date
- SSN/ID provided
The next sections include any check cash inquiries, retail information, history of checks ordered, social security number validation and information from LexisNexis Risk Solutions, Inc.
You can also view a sample ChexSystems report available on the ChexSystems website.
After reviewing your ChexSystems report, you get to know all the unpaid or due balance you have both in form of checks (to be paid to the retailers) and negative balance of your bank account (to be paid to the bank). If you see any false information here, you can dispute it in ChexSystems. For instance, you might have never given a check to a local retailer but it is mentioned in your report. You can request an inquiry with ChexSystems.
How Long Does the Record Stay in ChexSystems Report?
According to FCRA, ChexSystems is supposed to remove any negative information from the report that is seven years old and any bankruptcy that is more than 10 years old. However, consumer reporting agencies especially ChexSystems remove all the negative information (other than bankruptcy) from the report after 5 years.
Inquires that are displayed due to consumer action such as applying for a checking or savings account stay on the report for a maximum of two years.
How to Check your ChexSystems Report?
When you review your ChexSystems report, it might be difficult for you to grab the information present on it. There’s nothing to rush about. If there is any wrong information mentioned, it can be due to bank’s mistake, data entry error, or due to fraud/identity theft.
After reviewing your ChexSystems report, you will be able to know if there is any misinformation present. In order to review, go through each of the important sections of the report mentioned above quite carefully. Follow through these steps for a good review of your ChexSystems report:
- See how many entries are mentioned under-reported information
- Check each entry and validate the issue as well as your personal information
- Get your bank statement and validate any negative balance included
- Move through the report to check cash inquiries and retail information
- Check if report shows any unpaid checks
- Confirm with your checkbook if you ever wrote that check
This way, you will be able to know if there is any wrong information that needs correction or if there is actually any balance or check amount you need to pay off.
How to Get Your ChexSystems Report Cleared?
When a bank denies you a checking account, they will probably tell you the reason behind that. If your ChexSystems record is the reason, you need to get your ChexSystems report cleared right away.
In order to do that, there a few simple steps you need to follow.
Step 1: Get a copy of your ChexSystems report.
You can get a copy of your ChexSystems report following any one of the ways mentioned above. As the report shows the banks that reported you to ChexSystems, you get to know the accounts that have been closed and any balance you owe to the bank.
Also, look if there is any wrong information entered or reported.
Step 2: Pay off the Balances You Owe
Even though the reported information stays in the report for five years, you can pay your outstanding balance anytime to continue your banking activities. You can visit the bank to talk to a representative. They might help you through the process and lower down some charges for you as well.
Step 3: Open the Dispute with ChexSystems
If you see any wrong information, you are eligible to open the dispute with ChexSystems. To do that, you need to write a dispute letter to ChexSystems that highlights the issue and requests for investigation. Always send the letter through certified mail and request a return receipt to make your own dispute record.
You will most probably hear back from ChexSystems within 30 days. If you do not, you can send a warning letter for investigation or else you can concern legal grounds. Meanwhile, also send an investigation request letter to the information source (the one who reported any wrong information against you) and ask for an inquiry.
Step 4: Meanwhile, Open an Account with a Non-ChexSystems Bank
In order to resume your banking activities, you can open a bank account with any non-ChexSystems bank. There are many banks that are not affiliated to ChexSystems and so, they do not review your ChexSystems report before allowing you to open a checking or savings account.
Ending up with bad ChexSystems record does not ruin your financial future. Therefore, getting a second chance bank account is a good thing to consider. Make sure you have reviewed account fee and restrictions list though.
How to Avoid Issues in ChexSystems Report?
A lot of individuals do not realize that someone is keeping a watch over their banking habits and activities. And so, they keep on mismanaging their bank account. As a result, they end up in ChexSystems and are denied of further banking services for at least five years.
Two major reasons that lead an individual in ChexSystems are overdrafts and negative account balance. If you want to avoid any issues with ChexSystems and do not end up having a bad ChexSystems report, you need to develop good financial habits.
Following these rules will surely help:
Rule 1. Not Issuing Overdrafts
Make sure you do not issue several overdrafts in a short period of time. Nonpayment or insufficient funds lead to overdrafts.
Rule 2. No Bounced Checks
There must be no bounced checks. Issue checks only when your account has enough balance to cover the checks.
Rule 3. Keep a Check on Identity Theft
Looking into your ChexSystems report once every year is a good idea even if you are not reported of any bad ChexSystems record. It helps you take any action before time and report any identity theft to the police.
Rule 4. Keep a Track of Your Account Balance and Activity
You must keep a healthy track of your account balance and activities. When you do so, rule 1 and 2 automatically imply. Therefore, there will be no negative balance, overdrafts or bounced checks.
Rule 5. Give Your Closing Account a Second Check
Firstly, avoid having an account closed due to negative balance or failure of paying any due charges. Secondly, when you close an account, make sure there is no fee to pay, all your automatic transaction activities are stopped and all the checks are cleared. This way, closing an account does not affect your ChexSystems report.
The Final Word
A ChexSystems report is a good way to manage your banking activities. When you know you are being watched, you will avoid any such activities that result in bad records. Knowing how to check your ChexSystems report, how to file a dispute and how to avoid having a bad record in the first place ensures a secured financial future!