Ben Todd | Apr 16, 2017 | 3
How to Get Out of TeleCheck
What Is TeleCheck?
TeleCheck keeps a record on your banking behavior. If you have bounced a check, have overdrawn, or had non-sufficient funds, then TeleCheck will make a note of it. They create a risk report based that is based on over one hundred banking/behavior signals. They consider how you handle your money, how you manage your account, and how predictable your banking behavior is. If they create a report that says you are unreliable or a high-risk account holder, then you may find it difficult to get a bank account or open accounts in stores.
Opening up a bank account, checking account, or savings account may be tricky if TeleCheck has data indicating you are unreliable. If their report notes you as a risk and gives you a code 3, then you are going to have trouble opening an account.
Some say you can beat TeleCheck, but it is less about “You-vs.-them” and more about playing their game.
So how do you beat TeleCheck if you’ve been entered into their system?
Start By Asking for your TeleCheck Report
You may have heard people talk about how they are able to get a free TeleCheck report. It is not the same as getting a credit report where they offer you a free trial and then bill you from here to eternity. With TeleCheck, you are allowed one free report every year, and you can get it by calling them and asking for it.
This article is not giving out the phone number. You need to get it from the official TeleCheck website. You may also use their website to get your credit report. A common con is to claim to be TeleCheck to get your details and steal your identity. That is why it is important that you only use their official website. They will need your address, name, social security number, previous addresses (maybe) and your date of birth.
If a company does not accept a check, or a business refuses to do business with you because of a TeleCheck report, then you should request a code for the transaction. Use that code to get a free report from TeleCheck. They will give you three main reasons why they denied your check and/or gave you your code 3 refusal. They have hundreds of different reasons why they deny people, but on your free report, they should give you up to three reasons.
If you were declined based on statistical probabilities, then there may be no real reason. It sounds like they are giving you the finger in this case, but their response to that is, “The variables of risk models are “non-judgmental” –risk decisions is based on statistical probabilities.” This is what they may tell you if your risk-based decline was not based on evidence of an unpaid debt.
Checking The Report And Disputing Errors
Check the report for accuracy. Request changes if anything is wrong, and look out for criminal or unknown activity. If there is unknown activity on your account, then find out what happened, and prosecute if there is criminal activity, and once the case is settled, you can go back and have your TeleCheck report amended.
If there are any genuine mistakes, or purposeful misinformation due to other companies and other people, then raise a dispute. If the dispute ends and you are not the winner (i.e. your report wasn’t changed), then the company will allow you to add a note to your report to explain what happened in that circumstance.
Check Your Report For Debt
You may have one large chunk of debt in one loan, or numerous smaller debts, or a combination of the two. Debt is not a bad thing, but too much debt is going to damage your chances of getting new accounts or upgrading the accounts you already have.
If you have smaller debts, then pay off the smallest ones first just so they are off your report. Now tackle your larger debts. Start by contacting your creditors and asking if they will settle for less than the amount you owe.
Once you have paid off your debts, then the companies should remove any trace of your debt to them off your report, but sometimes it takes a while, and sometimes it doesn’t happen. Once you have paid off your debt, actually ask your creditor when they will mark your debt as “Paid in full” on your TeleCheck report. It may motivate them to take it off your report a little quicker.
You Can Wait It Out
Sadly, the blemishes on your TeleCheck report are going to stick around for five years. If you are willing to wait, then you could have a straight five years of great behavior and watch as your blemishes disappear into the past. It may not feel like you are winning or “beating” TeleCheck by waiting it out, but there is nothing stopping you spending five years building your credit rating up and saving your money. After five years, you would then have a great credit rating, a clean TeleCheck report, and you would have money saved.
Consider Other Banking Institutions
If you have had a troubled past with your banks and credit unions, then you may have to resort to second-chance companies. These are companies that either ignore TeleCheck, or they have a far lower tolerance for account misbehavior.
You can use these sorts of accounts while you wait for your TeleCheck or ChexSystems blemishes disappear with time.
The type of bank accounts given out to people with bad banking history are called Second Chance accounts. They come with more fees and more restrictions but are full bank accounts.
We recommend trying to apply for the BBVA Compass ClearConnect Checking Account. They have a reputation for giving accounts to customers with bad banking history.
You can also see our list of Best Second Chance Accounts, which are accounts for people with EWS, Telecheck, or ChexSystems records.
Put Forward Other Factors
A bank and credit union will not judge you on your TeleCheck report alone, there are other factors. Do a little research into what the bank uses to judge your application and work on the other factors. Your blemishes may stick around for a little while, and you are stuck with that fact, but other factors such as a good income may help tip the scales in your favor.
If you are applying for numerous different bank accounts at the same time, they may be running credit checks, which may damage your credit rating for a short while. The bank you are applying to may take a look at your credit rating and your TeleCheck report and decide you are not the ideal candidate for an account with them. In an ideal world, your credit rating would only matter if you want credit, but that is not the world we live in.
Keep money in your bank; lots of money if you can, but remember that TeleCheck doesn’t always run a “Funds check” on your account. For example, this may result in you being able to write a check to pay for a car, but not be able to buy a cheap new cabinet in a thrift store without getting a code 3 (which means the seller will not sell to you).
Beat Them By Behaving Yourself
Do not write bad checks, do not overdraw without permission, and maintain a reasonable level of security to lower your chances of identity theft. There are also certain things you can do to make TeleCheck suspicious and make them think you are a fraudster.
TeleCheck tries to figure out if you are a fraudster by considering what fraudsters usually do. They look at the things fraudsters typically buy, which stores and businesses they frequent, how much they spend and how quickly. In other words, if you start acting like a fraudster, then TeleCheck may mistakenly consider you one.
For example, if you are a conservative spender, and suddenly start spending lots of money in a different town, on things you wouldn’t usually spend money on, then TeleCheck may assume something foul is afoot.
Protect Yourself Against Check Fraud
Guard your checkbook in the same way you may guard your credit card or cash. This includes when you are out and about, when you are at work, and when you have people around your home. A common trick is to steal checkbooks and sell them to shady figures that distribute them amongst their friends. It makes it almost impossible for you to prosecute the original thief without solid evidence of them stealing your checkbook.
Have your checkbook sent to a safe location. A non-locking mailbox is not good enough. Also, do not allow other people the ability to negotiate your checks. If you do, you need some legal and insurance protection for if they rip you off. Don’t forget that it may not be the person you put in charge that rips you off, their negligence or foolish actions may allow others to rip you off.
Need a Bank Account but have ChexSystems problems or Bad Credit?
Try opening a BBVA Compass Free Checking Account! BBVA is one of the more forgiving banks and may give you a full-fledged REGULAR bank account when you apply online...even with bad banking and credit history.
And if you don't qualify for the regular BBVA checking account for some reason, you'll then be given the option of opening the special BBVA Compass Easy Checking Account, an account designed specifically for those with banking problems.
...learn more about BBVA Second Chance Banking here
Alert your bank right away if you think you have been victimized, and close your account if you can. Have them open a brand new one, and make sure you make a police report. You may place forgery affidavits on file with your bank, and you may give your bank permission (power-of–attorney), so they are able to discuss issues with TeleCheck that are related to any theft. You may also like to report any fraud of theft to TeleCheck, as this will help in the long-run when you try to have any blemishes removed from your TeleCheck report.