Your name in the ChexSystems database?
You are certainly not alone. There are many, many other people in the same boat.
What Is ChexSystems
ChexSystems functions as the sort of banking version of Equifax – this means that you won’t be able to actually start a new bank account because virtually all major banks use Chexsystems to do a reference check before giving out new bank accounts.
What Ite Means to Have a ChexSystems Record
Likely you already know what it means to be blacklisted by ChexSystems, but for the uninformed, you can expect the following:
- sudden bank account closure by your bank
- denied new accounts by banks
- denial from banking products
The good news (yes there is some) is that it is still possible to open a bank account, even when blacklisted by ChexSystems.
How You Get Your Name in ChexSystems
Basically by committing some financial misdeed that involves a bank.
This could be as serious as fraud (cashing fraudulent checks) or as minor as simply owing to the bank money from overdraft fees you forgot about. A good way to get a record is also to write a few checks that bounce.
Sp if you have cashed a few bad checks or missed a few payments to the bank, you are in danger of having the bank forward your information ChexSystems. Anyone who is listed in the ChexSystems database can tell you what a nightmare it actually is to start a new bank account.
Banks are notorious for sending a detailed report of financial misdeeds to ChexSystems with virtually no hesitation if you show even the smallest hint of financial instability.
What Are Your Banking Options if You are in ChexSystems
So what are your options if you are unable to open a new bank account because of bad banking credit history? You pretty much only have three options at this point:
- Look for a non-Chexsystems bank to open an account with
- Open a Second Chance Bank Account
- Use an alternative banking solution (prepaid reloadable debit cards, secured credit cards, internet bank account)
- Wait until your name disappears from the ChexSystems database list.
- Fight ChexSystems
Let’s look at these options in more detail.
Find a Bank That Does Not Use ChexSystems
This is the most popular way. I’ve already written extensively about this topics already.
Read the following:
Yes, even in 2017, there are a few banks that may not use the ChexSystems when screening new clients.
These banks, however, are in limited supply. The truth is that mosts major banks do use ChexSystems.
The list of banks not using ChexSystems grows fewer and fewer each year as more banks opt to adopt the ChexSystems banks.
The banks that don’t use ChexSystems usually have some other sort of catch like higher fees, limited locations, less bank account options, or such. And, depending on your location, you may not have such a bank in your area.
When looking for banks that don’t use ChexSystems, you are probably best off looking at local banks rather than big banks. The big banks probably use ChexSystems. Small banks and local credit unions might not, and you best bet is trying those first. You might also be able to explain, if asked, why you have a ChexSystems record and if the explaination makes sense, be given a new account regardless.
Try opening a BBVA ClearChoice Free Checking account. There is a good chance you’ll be granted this account, and if rejected, you’ll be offered their second chance account.
Wells Fargo also offers an account you might be able to get with bad banking history. I cover 10 such Non ChexSystems banks in this post.
Open a Second Chance Account
The other option, and probably the most popular and convenient, is to look at opening a second chance bank account.
A second chance bank account is a special bank account that allows people with bad banking history to open an account without worry about their financial history being used to decided whether they can open a bank account with bad credit or not.
The good news is that his account, although often limited with some restrictions and higher-than-normal fees, is offered by many of the large US banks, making it probably the easiest option if you can’t open a bank account.
We give a list of the best second chance accounts here.
Some of the better second chance offerings we’ve seen:
Enroll in CheckWi$e Then Apply for a New Bank Account
This is a program that was developed by the American Center for Credit Education. It’s basically a financial management course that once you enroll in AND COMPLETE will have you added to a special database. Banks and financial institutions have access to this database; it shows them good faith on your part and that you are trying to learn and fix your financial mistakes.
Basically, it’s kind of like an ani-ChexSystems list. It’s not a guarantee that you’ll be able to open a bank account, but it can help sway a bank to give you a chance.
Talk to the Bank Manager in Person When Applying
Another option is to schedule an in-person meeting with a bank manager. These persons often have the final say over who can or can’t open an account. If you can convince the manager to give you a chance, it’s possible to open a regular bank account with a big bank, even with bad banking history.
Use Alternative Banking Products
If you absolutely can’t open a bank account, it’s possible to get buy without a bank account by using some other financial product.
- Reloadable Debit Cards (such as GreenDot Prepaid Cards)
- Secured Credit Cards
- Internet Only Bank Account
These are all, depending on what you need to do with your bank account, usually inferior, more costly substitutions for a bank account.
But, it’s possible with some of these products to simulate what you can do with a bank account to:
- receive payments (i.e. paychecks)
- send money online
- spend money at stores
- pull money from ATM’s
So if you can’t open a regular bank account, then you can at least get buy one these products.
Fight / Dispute ChexSystems
Yes, it’s possible. Just like your credit history, you can get a free copy of your ChexSystem report, look for errors on it, and dispute any you find.
We give a detailed guide here.