Application Denied! Clearing Up Your ChexSystems Report

Estimated read time: 4 minutes

Savings and checking accounts are critical to financial success. They allow you to not only manage money efficiently but often do so with a host of benefits. These range from cash back incentives to interest accumulation and beyond.

While setting up a bank account is a fairly straightforward process, being approved for one is not always guaranteed. Should you find yourself in such a situation, it is likely that your ChexSystems Report includes negative remarks.

ChexSystems is a consumer reporting agency utilized by many banks to assess potential clients. The company keeps track of and reports information related to checking and savings accounts. If you have improperly used a checking or savings account in the past, ChexSystems will report the misuse to banks. Think of it as the checking and savings account equivalent of a credit card reporting agency.

Trouble Opening an Account? Enter ChexSystems

As mentioned above, ChexSystems identifies as a consumer reporting agency. It operates under the federal Fair Credit Reporting Act (FCRA) and is used in the assessment of bank account applicants. The report is detailed and straightforward. It provides information regarding the following:

  • Date of birth
  • Names (all known)
  • Addresses (current and previous)
  • Reported banking history (derogatory/suspicious activity)
  • Inquiries
  • Check cashing inquiries
  • Retail information and returned checks
  • Check order history
  • Address & address changes
  • Properties
  • Wealth index
  • Non-derogatory records
  • Derogatory records

All of the information provided to a bank results in an assigned score. Banks use the information and score to assess a candidate and whether to approve or decline their application.

Scores through ChexSystems range from 100 to 899. The higher the better. And while the score is useful, it is the report that provides more detailed information for individual and bank assessment. It shows potentially negative banking history such as overdraft fees, bounced checks, fraud, number of inquiries, and amount of checks ordered. These help banks further assess the merits of applicants and give applicants a look into their own banking history and how they may improve it. As with credit score reports, it is a viable tool for financial improvement and assessment.

If you are concerned about what is reported on your ChexSystems Report and how it may impact your financial well-being you can feel better knowing that the company keeps records for five years. This is less than the allowed seven years and lets consumers get back on track faster if they have derogatory marks.

It is also important to note if you have a less than ideal ChexSystems Report not all is lost. Chances are you can still open a bank account. Several banking institutions and credit unions offer second chance accounts or ways to open an account provided you meet minimum qualifications or payments. Make sure to do research into what offerings there are for you and which will be best suited to your needs.

How to Clear Your ChexSystems Report

Now that you know what a ChexSystems Report is and how banks use them to assess candidates, it is time to address how to clear up your report should you have negative information on it. If you have been denied a bank account this is critical.

Get Your Report

The first step in cleaning up your report is to request a copy of it. This can be done once every 12 months for free, an allowance provided by the Fair and Accurate Credit Transaction Act (FACTA). You can request your report in the following ways:

  • Submit a request online
  • Submit a request via telephone (800-428-9623)
  • Submit a request via mail (Chex Systems, Inc., Attn: Consumer Relations, 7805 Hudson Road, Suite 100 Woodbury, MN 55125)
  • Submit a request via fax (602-659-2197)

Once you submit your request you will receive the report via mail within five business days.

Find Fraud or Errors and Dispute

After receiving the report the next step is to look through it. Make sure to be tedious and look for any errors. If there are any errors within the report it is important to dispute them. These errors may be the barrier to opening a bank account. To dispute errors is relatively easy. Simply navigate to the "Dispute" tab on the ChexSystems website and follow the provided instructions. Once you submit your dispute an investigation will be performed. These take approximately 30 days, and, once completed, you will be notified as to the outcome.

Pay Off Remaining Debts and Fees

If there are no errors on your report, the next thing you need to do is to address what problems there may be. For unpaid fees and debts it is imperative you pay them off immediately. Call the collection agency or company the debt is associated with and make payment arrangements. Once you have made the payment in full, ask the same agencies or companies to remove the information from being reported. If they approve your request for removal, make sure to get written confirmation of their approval so you may submit the documents to ChexSystems.

If All Else Fails

Should the companies deny your request to clear records, the option you have left is to follow a strict and disciplined financial path until the records are removed naturally. Though this may be the longest method, it is also the most proven and sustainable. Simply follow sound financial advice, don't accumulate more negative marks on your record, and find ways to manage your financial well-being that are responsible and beneficial. Look for banks and credit unions with second chance checking accounts or banking services. These may come with fees or additional costs but help improve your banking history and chance of approval in the future.