Have You Checked Your ChexSystems Report?

Yes, we pay close attention to the all-important three digit number that tells us (and the rest of the world) about our credit worthiness.  There is another report, however, that is less known yet potentially important as well – especially for consumers who may have had a few slip-ups with their checking accounts.

We’re talking about a ChexSystems report, operated by ChexSystems, Inc., a company that interfaces with banking institutions across the country to gather information about particular activities and behaviors with consumers’ checking and savings accounts.

So what kind of information does ChexSystems collect?  Bounced checks, overdrafts, and final debits on closed accounts to name a few.  These “black marks” stay on your ChexSystems reports for up to five years and can affect a bank’s decision on allowing you to open a new account, or extending lower interest rates on loans.

While the majority of our nation’s banks (approximately 90%) take the ChexSystems information seriously, they are unfortunately under no obligation to tell consumers about the negative information on the report until after denying the account.  For individuals who have already closed a bank account before seeking another, this information could leave them completely unbanked for some time.

The good news is the Fair and Accurate Credit Transaction Act (FACTA) amendments to the Federal Fair Credit Reporting Act (FCRA) allow each of us to request a free copy of our ChexSystems report once a year if you request it within 60 days of being rejected from opening a bank account.  And, if you haven’t been declined but still want to see what may be sitting on your report, you can order one from their website and pay $9.00.  If you find a mistake, you can work through the dispute process in the same manner as the big three credit reporting agencies.

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