The Chex System provides deposit account verification services to its financial institution members to aid them in identifying account applicants who may have a history of account mishandling (for example, people whose accounts were overdrawn and then closed by their bank). The service sounds useful, and it is for banks and financial institutions. It alerts them to cases of fraud and other abuses. Those who routinely and intentionally write bad checks should have their criminal activities recorded in Chex Systems. However, not all negative activities are examples of fraud or intentional misuse. Most of us have written at least one check that has bounced, but they make it sound like we are all criminals. Even if you had a checking account closed in the negative balance and did not pay the negative balance in time, they will have reported you to the Chex System. To top it off, we have heard stories of people reported for amounts less than fifty dollars.
Each report submitted to Chex System remains on their files for five years, unless the bank or credit union that filed the report requests its removal or Chex System becomes obligated to remove it under applicable law. Also, a reporting member is under no obligation to remove an accurate report of a account mishandling due to payment of money that was owed. However, if a collection amount is reported, the member is obligated to mark the account as paid.
Under the Fair and Accurate Credit Transaction Act (FACTA) amendments to the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your Chex Systems consumer report, at your request, once every 12-months.You can get your free report here.
Please submit your dispute in writing to:
Mail: Chex Systems, Inc.
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Phone: By phone at 800-428-9623 or fax at 602-659-2197
They claim that you will be notified of the results within approximately 30 days and if errors are discovered and they will be rectified immediately. If the reinvestigation does not resolve your
dispute, you are entitled to request a brief statement be added to your consumer file outlining the nature of your dispute. Here’s how: Send a statement to them, in writing, that clearly
indicates that you want that statement to be added to your file and make sure you sign the request.
Do not close any other checking accounts or your savings accounts. Keep the balances in the positive
Pay all overdraft fees as soon as possible.
Make good on the checks.
Once you have paid the overdraft fees and satisfied everyone who received a bounced check, have a short explanation inserted into your Chex System file.
Just because you are on the Chex Systems, this does not mean that you will be denied a checking account from your local bank. Sometimes this can be overlooked by the bank to
open a new account if they want your business.
There are several banks On-Line that will give approve checking accounts to individuals who are on the Chex System, but are limited to check cards with no check writing privileges, so we did not list them on this site. We have however, heard of two reputable banks that include Etrade Brokerage (Please Note: Only Etrade Brokerage will approve you and not
Etrade Bank. This brokerage account can be used like a checking account and you can order checks. One of our staff members was just recently approved at Etrade Brokerage with a negative Chex Systems
report. Please also note that our staff member did not order checks when he first applied to increase the chances of approval, however he did order a check card. A $500 minimum balance is also
required.) Next, Compass Bank claims to have a second chance program for personal checking accounts. If you are looking for a business checking account and have a EIN number, you may want to try Bank Of America. If you get denied by any of these banks or know of any non chexsystems banks,
please email us at help@consumerbadcreditguide.com so we can adjust our list accordingly. Disclaimer: The information above was written in good faith, but there is no guarantee that you will be
approved for a checking account.
The above list and information on bad credit checking accounts was last updated on 1/02/2010.
Find more information on Bad Check Laws
You may also want to read Bad Credit Business Checking
Learn how to get a Personal Loan For Bad Credit Repair With No Checking Account
Information about Preventing Overdrafts And Bounced Check Fees