If someone mishandled a checking or savings accounts in the past and still owes their old financial institution some money then they most likely have been reported to ChexSystems. Unfortunately they probably won't know that until they try to open a new account somewhere and get declined. People are entitled to one free copy of a ChexSystems report per year, and the same goes with credit reports. Visit ChexSystems official website for more information, or use ChexSystems phone number to contact them at 1-800-428-9623.
What is ChexSystems?
Just like a credit report records the way people handle their loans, credit cards, etc., ChexSystems records how they've handled their checking and savings accounts in the past. Unlike credit reports, they only record negative account information, the status of the accounts, and inquiries from other financial institutions. Information such as NSF activity, negative balances, outstanding debts, and account abuse are commonly reported items and will remain on the report for at least five years unless removed by the reporting source. This is just one of the ways the financial industry works together to keep people from burning multiple institutions.
How do Customers Get Out of ChexSystems?
After being reported and being denied to open accounts at all the local banks and credit unions its easy to understand that options at this point are few and far between. It can be pretty hard to get one's finances in order if no financial institution is willing to open up an account. Some people will start cashing checks at a check cashing agency, paying bills with money orders, and borrowing money from payday loan centers. The fees from doing so will quickly cost far more money then what is owed to the previous financial institution that alerted ChexSystems.
So with that said, not only is it the right thing to do but the easiest and least expensive way to handle a ChexSystems removal is to find the financial institution that filed the report in the first place and pay them back what is owed to them. Once they update ChexSystems or remove the negative info from the report that person should be free to once again open accounts at the financial institution of one's choosing.
List of Financial Institutions that Do Not Use ChexSystems
It seems like 99.9% of financial institutions use ChexSystems so finding one that doesn't is like finding a needle in a haystack. There may not even be a financial institution throughout the entire state that doesn't use them. However, if the customer is absolutely bent on not paying back the financial institution, there are a few sites that maintain a list of banks and credit unions that may not be using the reporting system or that are likely to give people a second chance even if items pop up on the report. Here is one such site that seems to maintain the most extensive and up to date list, ChexSystems Bites .
Financial hardships happen, and they are an unfortunate part of life, but if there is anyway possible to prevent someone from leaving a financial institution with a debt then they should do it. Most likely they will have to be paid back sooner or later but it just makes more sense to avoid the headaches and hassle of getting in and out ChexSystems altogether, and customers will be much better off in the long run.
Jerry Barker - Jerry Barker is a real estate agent and lending professional in New Jersey. He began purchasing properties for investment in 2002 and ...
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