Chexsystems is a database which provides information to banks to identify people who may have a history of mishandling a bank account. This may include intentional misuse, such as check fraud, or unintentional misuse, such as bouncing checks.
All consumers are entitled to a free copy of their Chexsystems report once a year. In addition, if you are denied an account due to Chexsystems, you have a right to the copy of the account. If there is any incorrect information, there will be instructions for how to dispute it. Disputing the account may improve your chances of obtaining an account, but this will only help if the information is not accurate. If you are in Chexsystems due to past mistakes or hardships, you will not be able to remove your information.
There are alternatives available for getting a Chexsystems Checking Account. While they might not be named as such, several banks offer accounts that either do no check Chexsystems or that are designed as second chance checking accounts. Compass bank offers a checking account with a monthly fee that includes checks and a bank card. Banks that are based online may also be more likely to approve someone in Chexsystems due to lower overhead. Many local banks also have second chance accounts.
If you are employed or part of a community organization, check to see if your employer or group has an arrangement with a local credit union. A local credit union may be willing to consider your personal situation and make an individualized decision.
When looking for a non-Chexsystems Checking Account, be careful to avoid scams! Look for a bank that is FDIC insured or, for credit unions, NCUSIF insured. Do an internet search on the bank to look for reviews. Read the terms of the account carefully. There may be hidden fees. In addition, some non-Chexsystems accounts may not allow the use of checks and restrict the customer to a debit card.
Finally, if you have been in Chexsystems due to overdrawn balances or other mistakes, be careful in managing your new account. After a period of several months to a year of being a good customer, your bank may be willing to offer you an account without the extra fees or restraints that might come with a second chance account.
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