If your banking account has ever gotten you in trouble, your name will likely appear in the ChexSystems database. Maybe you’ve bounced a few checks, or perhaps you closed an account with a negative balance, and forgotten to pay it. Whatever the reason, once you show up on the system, life can become rather difficult.
ChexSystems is to the banking industry what Experian and TransUnion are to credit lenders. It shows any problems you’ve had with a bank account, including NSF checks and negative balances, that have been reported by the bank. Any items that are reported stay on your record for five years.
Nearly all banks use this database to evaluate potential new customers. ChexSystems does not approve or deny account applicants; it is up to the bank to decide how to use the information. However, if you have reported items, it can be quite difficult to get a new checking account.
There are a couple of ways around this, though. You may be lucky enough to find a bank in your area that does not use this system, or will be willing to let you open an account in spite of negative items on your record. Some banks may be willing to forgive a few bounced checks, but if you’ve had more serious problems, this may not be a viable option.
The other option is a “second chance” bank account – a quick Google search will help you find many of these accounts. The banks that offer them typically do not run credit checks. They will typically issue you a prepaid debit card, but many will not grant check writing privileges. Still, if you need a bank account to pay bills, this might be a viable solution. For many people, living without checks isn’t much of a problem anyway, since most bills can be paid online with a debit card.
Life after being reported to ChexSystems can be difficult, but with a bit of research, it is possible to get an account…even if you have to adjust to not writing checks.
If you’re having problems keeping up with your bill problems, go to http://www.NewYorkBankruptcyHelp.com to get a free copy of my downloadable special report about fighting back against abusive bill collectors.