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Article #209: What to Do if You're Listed in ChexSystems

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"...I'm sorry, my bank cannot help you. reporting agency, ChexSystems has to
You're listed in ChexSystems..." follow the Fair Credit Reporting Act
My wife and I just moved from South Bend, (FCRA) and the new Fair and Accurate
Indiana to Indianapolis. We needed a Credit Transactions Act (FACTA). This
checking account. We both wanted a fresh means you're entitled to one free copy of
start after bankruptcy, and opening a new your ChexSystems report every year.
checking account with a new bank seemed What I Figured Out By Accident
like a good place to start. After my unexpected rejection from the
I chose to go with a national bank and bank on Fall Creek Road, I needed a few
found a branch on Fall Creek Road in days to regroup.
Indianapolis near Geist Reservoir. I was My wife and I shared a car at the time,
nervous. and she had a job interview at a RE/MAX
The thing about filing bankruptcy that real estate office near Geist Reservoir.
most people have a hard time As I waited for her, I noticed three new
understanding (unless they've gone banks just a stone's throw from each
through it themselves) is the feeling of other. Literally, one on each corner of
inferiority. Each new credit application the road. What were they thinking? None
can cause anxiety. of the branches looked busy. My guess was
I'll share a quote that pulled me through they were stumbling over each other to
this stressful time in my life. It's from win new bank customers...even ones listed
Eleanor Roosevelt. She said... in ChexSystems.
"No one can make you feel inferior So I took a chance.
without your consent." I locked the car, hoping Michele wouldn't
I love that quote. return right away. Then I picked the bank
So I walked into the bank branch with the that looked the newest. I went in and
attitude, "Everyone knows I filed asked to be directed to the person who
bankruptcy-so what?" I asked to be could open a new checking account for me.
directed to the person who could open a I sat down in the branch manager's
new checking account for me. office. And as he was going through the
The lady at the desk who began to talk to routine pleasantries, I noticed him
me about opening an account was really reaching in his drawer for a new starter
nice...until she found my name in checking account kit.
ChexSystems. I then spoke up and asked, "But what if
Then everything changed... I'm listed with ChexSystems?"
"...I'm sorry, my bank cannot help you. His answer shocked me.
You're listed in ChexSystems..." "We don't use CheckSystems. I'd be happy
That was that. to open an account for you."
I walked out of the bank without a And so he did.
checking account because of a company I returned to the car, excited to share
called ChexSystems. my discovery with Michele. We had a
What is ChexSystems? checking account from a bank!
ChexSystems is a checking account What I hope you glean from this is that
verification company based in Woodbury, not all banks or credit unions use
Minnesota. Banks and credit unions use ChexSystems. It may seem like it in some
them when people apply to open a checking cities, but they absolutely are not used
account. It's essentially a consumer by 100% of financial institutions.
reporting agency designed to check if How To Get a Checking Account If You're
people have a history of writing bad Listed In ChexSystems
checks. If you're listed in ChexSystems The best way is to find a bank that
you're usually not allowed to open a doesn't use ChexSystems to verify new
checking account with that bank. accounts.
ChexSystems is the largest player in the Here's how to go about it...
check verification industry. However, 1. Start by making a list of all the bank
there are other companies that provide branches in your area. You'll do better
similar services, such as TeleCheck and if you stick with the smaller, local
Decision Power Insight from Equifaxreg;. banks and avoid the big banks.
I'll focus on ChexSystems since they're 2. Call and ask to speak to the branch
the largest. manager.
Are You On The ChexSystems Blacklist? 3. Inquire about their different checking
There are several actions that can get account programs. (How much money do you
you on ChexSystems' blacklist... need to start an account, how long does
- Fraudulent handling of a checking it take, can you do it online, what check
account number will they start you out at, etc.?)
- Bouncing a check resulting in 4. Then ask how they verify new accounts.
non-sufficient funds (NSF) Do they review your credit report? If so,
- Overdrafting your account while using which credit report, and will the credit
your ATM or debit card inquiry lower your credit scores? (Of
- Having your account "closed for cause" course, you know the answer to this
One of the most common ways to get listed question is yes-but let's see how many
in ChexSystems happens when you move or tell you the truth.) Or, do they use a
change banks. Because check and debit check verification service? If so, which
card charges don't show up on your one?
account as soon as you make them, you can If the branch manager tells you they
get hit with NSF charges after you don't use ChexSystems-you've got a
thought you closed your old bank account. winner! Be sure to write down the
The best way to avoid this problem is to person's name and make arrangements to
leave your old account open until you are stop in and open an account. If the
sure all your transactions have cleared. branch manager tells you they use
Once you're listed in a check ChexSystems...here's what to say next...
verification service such as "...Darn it. I'm listed with ChexSystems
ChexSystems-it's best to just pay what's and they're a bear to deal with to get
due. Also, make sure you request a letter something resolved. Is there anything I
on that bank's letterhead stating that can do to get an account with you?"
all debts have been paid. If they say, "No," ask them...
Now, one would think that if you included "Do you happen to know of a local bank
an unpaid check in your bankruptcy that doesn't use ChexSystems or a program
petition that your debt would be erased-I that can help me open a new bank
personally didn't find that to be the account?"
case. Sometimes you can speed up your search by
I learned that entries remain on your asking for help. It will take you only a
ChexSystems report (even if they're paid few seconds to ask, but the right answer
off) for five years. So if you think may save you hours of research.
you're safe because you paid the check or A New Trend Developing
included it in your bankruptcy, you may I've noticed more and more banks are
not be. reviewing credit reports in lieu of using
This was my ChexSystems experience. Yours check verification services. Sometimes
may be different. If you have a they even do both! I wouldn't open an
ChexSystems story to share go here to account with a bank that does this-mainly
tell me about it. I'll compile all the because their credit inquiry will lower
information and share it with everyone in my credit scores. So keep looking.
a future issue. Banks That Really Care
How Do You Know If You're Listed In Some banks are willing to give even
ChexSystems? bankrupt people a break. If you're
You'll either be unable to open a new searching for a new bank and you think
bank checking account or you'll have a you may have trouble getting a checking
difficult time getting stores to accept account, ask if they have some kind of
your checks. "second chance" or "fresh start" program.
You see, the same corporation that owns A lot of banks have probationary programs
ChexSystems also owns SCAN, the company that offer limited services for a set
that verifies checks at places such as amount of time (usually six months). If
Wal-Mart or your local grocery store. you really need a checking account, these
When you write a check at a store, and programs can be a lifesaver.
they put it through that little machine There are also two specific services that
at the register, they're looking to see a lot of banks and credit unions are
if you're listed in either SCAN's or becoming affiliated with. Basically,
ChexSystems' databases. If you are, they these programs allow you to take a course
usually won't accept your check. on how to manage a checking account. And
If they do accept your check, then when you complete the course, you'll be
ChexSystems has guaranteed that it will given a certificate to open a bank
be honored by your bank. If it bounces checking account with a participating
like a rubber ball, then ChexSystems will bank or credit union.
pay the merchant the amount of the check The two programs are called Get Checking
out of their pocket...then you not only and InBalance. Get Checking is geared
have to pay your bank's NSF fee, but more toward banks, while InBalance is
ChexSystems' as well...which can get more for credit unions.
expensive. So don't be afraid to ask. Remember what
The best way to know if you're in Eleanor Roosevelt said...
ChexSystems is to review your ChexSystems "No one can make you feel inferior
report. Since they're a consumer without your consent.






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