What Is ChexSystems? | The Ascent

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If you’ve been turned down for a deposit account, it may be because of a bad ChexSystems report. Pull yours and then decide on your next steps. You have the following options.

Open an account with a bank that doesn’t use ChexSystems

Most banks and credit unions consult ChexSystems before approving new accounts, but not all of them do. Consider working with a bank that doesn’t use ChexSystems if you can find one that offers an appealing account and has reasonable fees. Inquire if the bank checks your ChexSystems report before filling out an application if you’re not sure.

Look for a second-chance checking account

A second-chance checking account is a special kind of checking account designed for high-risk clients. These accounts may have higher fees, but if you show that you can handle your money responsibly, your bank may upgrade you to a regular checking account in time.

Try to improve your ChexSystems report

You cannot get rid of legitimate negative information on your ChexSystems report, but you can stop doing the things that put those negative marks there in the first place. Here are a few tips:

  • Set up overdraft protection: Many banks enable you to link your checking and savings accounts, so money automatically transfers from your savings account to your checking account if you try to withdraw more than you have in your checking account. This can help you avoid overdrafts on your ChexSystems report.
  • Keep an eye on your account balance: Check your balance before making a withdrawal if you know you don’t have a lot of money in your account to avoid overdrafts. If you know your account charges monthly fees, find out when these come out of your account every month so you can be prepared.
  • Stay connected to your old bank after account closure: You might close a bank account and forget you have bills paid automatically from the now-defunct account. This can result in negative balances you’re not even aware of. Provide your bank with updated contact information when you close your account so it can get in touch with you if any issues like this arise.
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None of these things will improve your ChexSystems report overnight, but they can make a difference in time.

If you do pay off old debts, get a receipt from your old bank showing that you’ve done so. Some banks may be willing to work with you even if your ChexSystems report is bad if you can prove you’ve settled your debts.

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