Other than maybe seeing a sign on a business door or counter many consumers have no knowledge of ChexSystems, until it's to late. So what is ChexSystems and what do they do? Why are they important to our financial system?
Made up of a network of banks, credit unions and other financial institutions, ChexSystems is a reporting agency that maintains a database of consumers who have either knowingly or unknowingly mismanaged a checking/or savings account. While most are listed due to circumstances beyond their control, unfortunately some are listed for fraudulent activities such as purposely passing bad checks. It is these bad apples that make ChexSystems a necessary evil and an important piece of our financial system.
If you have found yourself in the ChexSystems database, there are a few things you need to know.
First - While this may sound harsh, your listed because you have done something wrong. It may have been an innocent mistake, but you have done something to be listed. Closed an account owing money, not paid an NSF charge, etc. While there are occasions that people have been reported to ChexSystems due to a mistake, these occurrences are few and can easily be cleared up.
Second - Your listed for 5 years per occurrence or reported account. There is no getting around this and getting off early is unlikely to happen. Just like your normal credit report, there is a reporting period and getting a negative listing removed early is extremely difficult.
Third - ChexSystems is unrelenting and unforgiving. As bad as it may be, there is a reported lack of customer service and help getting anything resolved when contacting customer service.
So what should consumers do once they are listed?
First - Get a copy of your ChexSystems report and verify the accuracy of the report. If you did not do anything wrong, you can get the inaccurate information removed. It may take some work, but it should come off when you prove your innocence. If you did do something wrong, make sure it is exactly how it happened and 100% correct.
Second - Pay what you owe. As hard as times are right now, you need to pay this money and get the issue resolved as soon as possible. Only then will you be able to move forward. If you can't afford to pay it all, contact the reporting bank and make arrangements to get the debt paid.
Third - Start looking for a second chance checking account. Fortunately, there are banks and other financial institutions that will work with you and allow you to have another checking account. While this may sound like a lifesaver, you need to look at the offer and make sure you are not getting ripped off. Try looking for banks in your local area and be very careful when doing business with any online only financial institution. Do not send any money without doing your due diligence.
Fourth - Avoid businesses that offer ChexSystems removal services. This is the same concept as credit repair and should be avoided. They can do no more for you than you can do for yourself.
While being listed in ChexSystems is not where you want it to be, your not alone and with our current economic situation it is only going to get worse. The best option is to move on and get started repairing the damage as soon as possible.
Chase Morris is the webmaster for , a state by state directory of banks offering second chance checking accounts.