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What To Do If ChexSystems Has You Blacklisted

ChexSystems and Being Blacklisted

If you’ve had a problem with a bank in the past, whether it involved a bounced check, unpaid overdraft, or some other issue, they may have placed a report with ChexSystems

ChexSystems is a consumer reporting agency that banks can use to determine whether to accept you as a member based on how you have handled your bank accounts in the past. If you have a bad report, they can choose to decline your request to open an account with them. 

Unfortunately, if you’re being refused the opportunity to open a new bank account, ChexSystems will keep negative reports on file for five years, so it’s an issue that will not be resolved for some time.

Fortunately, we can give you some options to help you get the bank account you need and weather the ChexSystems storm. 

How Does ChexSystems Function?

Eight out of ten banks use some sort of early warning verification system such as ChexSystems to determine whether you are a suitable potential customer or not. The process essentially works the same as a credit card application — you apply, they check, and decide whether to accept you or not. 

The system assigns you a risk score from 100 to 899 (which is like a credit score), that you can request if you want to see how they have classified you by filling out a disclosure form on their website.  

      • There are a few stipulations which come into play that are determinations for whether a bank can even check your risk factor. Here are those situations: 
      • Opening a new checking out
      • Written permission requests
      • License applications which involve financial responsibilities
      • Factors involving child support
      • Court-ordered subpoenas of your financial records

Important Note: ChexSystems only tracks issues with closed bank accounts, so if your account is active and you’ve had a mishap with deposits, it is not going to show up on the reporting agency data, so you can still make things right or get an additional account if you do not have a bad reputation from a previously closed account. 

Do Credit Reports Come Into Play?

They might, if a bank wants to consider more than your banking history to determine if you would make a good client, especially if you are requesting an account with a credit-backed overdraft. 

Been Rejected But Need a Bank Account?

Five years is a long time to go without a bank account due to a bad reputation on ChexSystems. The good news is that you don’t have to. There are still options available to you while you wait out the blacklist. 

Similar to how credit cards have options for bad credit, there are second chance accounts willing from banks and credit unions willing to help you . . . for a fee. 

They will provide you with banking services, but you will have to pay a monthly fee in return. This is a valid prospect for a year or two until you show you can handle an account responsibly, then you can upgrade to a better banking option with free standard services. 

Are There Other Options?

There are. 

You could instead opt for a prepaid debit card, which will cost a low fee but in return has strong protections in place to keep your money safe. 

Another option is to just be persistent. Remember that not every bank or credit union subscribes to ChexSystems or other reporting agencies. 

Sooner or later, you may find a checking account with no credit report on ChexSystems, one that has the services you need for no monthly fee and that will not only provide you with the banking services you require, but will give you a chance to rebuild banking trust.

How To Get Out Of ChexSystems

If you do not want to wait five years for the negative report to end, this is how to clear your Chexsystems record:

      • Request Your Report – First, get a copy of the information so you can see what the dispute is and determine the best way to resolve the situation. You are eligible for a free report every twelve months. 
      • Identify Mistakes – Read through the report, looking for any errors. If you see something on there that is incorrect, your first plan of action is to get that resolved by disputing the information via mail, phone, or online methods. 
      • Pay Off Debts – Any accurate debts on the report can be paid off to resolve the situation. If your budget is tight, you can attempt to negotiate with the account in question to resolve the issue for a lower amount. 
      • Clear Your Record – Once the payments and errors have been cleared, ask the accounts you resolved to clear up the report on ChexSystems. Alternatively, you could send receipts showing the payments as complete directly to ChexSystems. 

ChexSystem Report Freeze

If someone steals your identity and opens a bank account in your name in order to misuse it, then you may want to freeze your ChexSystems report until you can resolve the matter. 

Furthermore, freezing it before that happens is a good precaution to ensure that it doesn’t, since banks will be unable to access the report and are unlikely to accept a request for a new account from your potential thief. 

Keep in mind, if you have your report frozen, you may be unable to do business with new banks until you have it unfrozen. 

Here is how to freeze your report and how to remove a ChexSystem freeze: 

      • Simply submit a freeze request on the ChexSystem website
      • Receive a PIN which you can later use to unfreeze the account
      • Use that PIN to unfreeze when you need to interact with a new bank

Is There Still a Way To Get Car Insurance For Blacklisted People?

It can be difficult to negotiate car insurance if you don’t have bank support, but like with credit card companies, there are always agencies who want to help you even if you have a bad credit score or ChexSystems freeze. 

Shop around and see which insurers will work with you. You will eventually find someone, especially because car insurance is a legal requirement, but be aware that you will probably have to pay higher fees or premiums as a result of these determinants. 

Featured Image: Megapixl

About the author: Liam McGillivray is a writer and editor at Wealthy Millionaire. He holds a Master's degree in Public History from the University of Victoria and a BA in History and Classical Studies from Queen's University. His interests include fantasy literature, NFT gaming, and film studies.

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