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Jun 08

Consumer-Reporting Agency: Everything You Need to Know About ChexSystems

Reading Time: 4 mins

As a consumer of bank services, you may be familiar with one of the most known credit reporting agencies like Equifax, Experian, and TransUnion. Their job is to collect, analyze, and look at your overall financial health and provide credit reports. If so, are you also aware of the agency that checks your banking behavior? 

The agency that handles and tracks a person’s banking behavior is ChexSystems. If even once in your life you have had a checking or savings account closed by the bank you opened it with due to having many overdrafts and other related problems with your account, your account may have ended up in one of ChexSystems files. 

Compared to having low credit scores, a low ChexSystems Consumer Score could also pose negative effects on your account and cause you to be rejected when trying to open a new bank account. To learn more about what ChexSystems is and what to do if added to their files, continue reading below. 


ChexSystems Defined 

ChexSystems is a screening consumer reporting agency that works behind financial systems in helping them prescreen some new clients who want to apply for bank accounts. You may think of them as the institution that takes time to check if a client is a suitable applicant or not. Numerous banks use ChexSystems, and there is also a list of banks that don’t use ChexSystems and are not dependent on them. 

Banks that use ChexSystems use it because they want to arrive at a well-thought-out decision to find out if an applicant, based on their earlier behavior, may be at a higher risk for not managing and misusing their bank accounts.

This institution’s powers should not be taken as a joke because, as stated by the National Consumer Law Center, over 80% of banks use bank account screenings like ChexSystems to help them in evaluating whether they will approve a customer.


How Does ChexSystem Operate? 

The main work of ChexSystems is to keep track of customer’s checking, and savings account activities and histories. They create reports for the banks and credit unions affiliated with them and show them why a particular account was closed.

Some of the information you could find on a ChexSystems report is the customer’s errors, irresponsible management of account, failing to pay for due fees, suspicious activities, and the like. Also, you must be aware that if you have a negative history in your bank account, it could stay in your ChexSystems for as long as five years. 


What Can I Know If I Have a ChexSystems File? 

If you have been approved to apply for a new bank account without having to face any challenges or rejections ahead of you, it is a good sign that your ChexSystem file is not in harm’s way and it’s in good condition. 

The Fair Credit Reporting Act (FCRA) enables people to access their ChexSystem reports every 12 months charge-free. To do this, you can ask for a copy of it online, and it’s available to be viewed by phone or sent through a mail request form. Lastly, if you have a good record in your ChexSystems report, chances are your account’s report will be short and simple. 


What Can I Do if I Get Added to ChexSystems? 

If you have been rejected when applying for a new bank account, you first should ask why. If they tell you that the reason was because of a ChexSystem report, you may talk to ChexSystem to review your account and dispute any false information. 

It is vital that before panicking, you contact ChexSystems first to have a personal copy of your report. Review it thoroughly and identify if there are errors in the report, identity theft, or an account that you do not recognize. 

If you find any inaccuracies and incorrect information in your ChexSystem report, file a dispute, and you can expect that they will investigate the case immediately. A piece of false information in a report usually will be corrected or removed within 30 days. 


What Are Your Rights When Dealing With ChexSystems? 

Like other consumer credit reporting agencies, ChexSystems is governed by the FCRA. You have the right to protect yourself from any misconduct done by the agencies and clarify any information that ChexSystem collects. 

You must become a knowledgeable consumer who cares about finances and how you are being protected. Some of your rights include knowing why you are not eligible to open a new bank account. The bank is in charge of informing you why such things led to not opening a new account.

Also, you have the right to view your own ChexSystems report for every 12 months only. There should be no hidden charges in viewing your report as it should be freely shown to you. Lastly, if you feel like something is incorrect in your report, you have the right to correct the institution and request an investigation to help you clear the errors. 



As a consumer, it is your responsibility to create a good history for your banking. A good history will benefit you because there will be fewer challenges to face setting up new accounts. If you have any problems opening an account, you can use the above information to help you get to the bottom of it and hopefully overcome the issue. 


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