Banks and credit unions are required by law to furnish you with a disclosure identifying which consumer reporting agency checked your banking history information as well as their contact information. Most people learn about ChexSystems, a commonly used consumer reporting agency similar to Transunion located in the United States when they find out that they have been denied at their bank or financial institution when enrolling in bank accounts or other services.
Once you know which company, most likely ChexSystems, helped the bank or credit union make a decision with your information regarding your ability to have a bank account, then you can reach out to ChexSystems to review your consumer report and submit ChexSystems consumer disputes if necessary.
The Importance of Having an Accurate and Clean ChexSystems Record
As noted above, ChexSystems is widely used among many banks and credit unions to help them determine if they, the bank, are willing to give their consumers a chance with a regular bank account such as a checking or savings account. With ChexSystems being so popular, you must do your best to maintain a positive banking reputation with your bank. You want to avoid having your information be reported to ChexSystems and tarnish the ChexSystems report that banks and credit unions commonly review as apart of their application process. Reviewing your ChexSystems report is also very important to make sure that it displays accurate information, you don’t want to end up denied for a bank account only because the ChexSystems record information being reviewed is inaccurate. If your ChexSystems report is incorrect, you can dispute it.
Having an inaccurate ChexSystems report or tarnished record can limit your ability to open checking or savings accounts at banks. Having a bank account is necessary because it makes managing your money and paying your bills at your bank more accessible, safer, and cheaper.
Financial Mistakes That Banks Report to ChexSystems
The ChexSystems website has a list of “common mistakes to avoid.” Making common financial mistakes could result in banks or credit unions, sending information to a consumer reporting agency like ChexSystems. When banks or credit unions run your ChexSystems report, then they will see these things listed and determine if you are eligible under the bank’s list of qualifications. Here is a summary of “common mistakes to avoid” to help your information stay out of ChexSystems and clean up your ChexSystems report as you conduct daily financial transactions with your bank account.
Pay Attention to Automatic Payments
Look through past checking account bank statement information and identify any automatic payments that you have withdrawal from your checking accounts. Before closing any checking accounts, open a new checking account and transfer those electronic payments over or cancel them before closing the old checking account at your bank. It’s possible to face steep overdraft fees at your bank from past, closed checking accounts from automatic payments you forgot came out of your bank account and end up in ChexSystems.
Don’t Leave Old Bank Accounts Open
When you are no longer using a checking account, contact the bank or credit union, and have it closed right away. If you have a checking account open with no balance at a bank, you could end up in ChexSystems by being charged a monthly fee resulting in overdraft charges and unpaid fees you are won’t know you have.
Don’t Spend a Check Until it Clears
When you are paid by check, especially from a different source like from selling a car or from a friend, make sure that the check completely clears on your checking account at your bank before withdrawing cash from it. If the check ends up bouncing at your bank and you have already removed the money, you may end up in ChexSystems and be charged steep fees.
Only Write Checks if You Have the Money to Cover It
Even more important than making sure you deposit proper checks in your bank account, is that you write good checks. Don’t be caught writing bad checks and end up in ChexSystems because you forgot about it after you wrote it. Make a note to keep that money available in your checking or savings account at your bank until spent and don’t write checks until the money is available to spend in your bank account.
Co-Signing Can Mess Up Your Banking History
Be careful when co-signing your information on a bank account with someone as joint account holders at your bank. If the joint account owner abuses their bank account, you may be held responsible for their mishandling and end up in ChexSystems. Also, allowing someone to have your PIN information can result in unauthorized funds coming from your bank account, causing more overdrafts and being reported to ChexSystems.
Reviewing Bank Statements is Your Responsibility
Another common mistake is that you don’t review your bank statement information that comes from your bank for low bank account balances, monthly payments, or unauthorized charges related to fraud or errors. Not receiving your bank account statements is a mistake because financial mistakes happen when you don’t keep track of your finances. Financial mistakes with bank accounts may be reported to ChexSystems.
Report Lost or Stolen Checks
If you lose your checks and don’t report this issue to your bank or credit union, you could end up unaware of a compromised bank account. A compromised bank account could report you to ChexSystems as well.
These common mistakes can be interpreted to banks and credit unions as bank account mishandling due to poor bank account management history. And some of them, for example, writing bad checks, could be viewed as attempted check fraud, and having fraud on your record can make your chances of opening a bank account slim to none. When a bank reviews your information and encounters account mishandling or fraud on your account, then the bank may report it to ChexSystems.
Now that we have reviewed the importance of an accurate ChexSystems report and mistakes to keep in mind and avoid, let’s talk about the process of submitting ChexSystems disputes.
How the ChexSystems Dispute Process Works
It is simple to submit a dispute to ChexSystems when you know that there are inaccuracies with your information from banks listed on your ChexSystems report. But it is essential to know the steps of the dispute process and how to handle them so that you can hopefully receive the best outcome of the ChexSystems dispute you are submitting.
Request your ChexSystems Consumer Report
The first step to take in the dispute process is to get a copy of your ChexSystems consumer report to view what banks have reported. You are eligible to receive a free copy of your ChexSystems information after being denied a bank account, or you can request free ChexSystems report information every 12 months. There are a few methods when requesting your ChexSystems report before starting the dispute process, and you can receive your consumer report in a few different ways:
- Go to the ChexSystems website here and fill out the online form by including your personal information and answering questions. You can request that your ChexSystems report is sent to you online or through the mail.
- If you prefer to send your ChexSystems request by mail, print out the form, and send it to the following address: Chex Systems, Inc. Attn: Consumer Relations, 7805 Hudson Road, Suite 100 Woodbury, MN 55125.
- If you prefer to send your ChexSystems request by fax, print out the form, and send it to (602) 659-2197.
- You can also call ChexSystems customer service to request your ChexSystems report: The telephone number is (800) 428-9623.
Review Your ChexSystems Report for Accuracy and Submit Disputes
After you receive your ChexSystems report, the next step in the ChexSystems dispute process is to review the information reported by banks for accuracy. You will want to look at the following details to dispute:
- Verify dates indicated by your bank or credit union on your ChexSystems record to dispute
- Verify labelings of reported information from your bank, such as fraud or account mishandling on your ChexSystems report to dispute
- Make sure that information from a bank listed with ChexSystems isn’t outdated, especially after 5 years to dispute
- Review personal information for accuracy, such as your SSN, name, and more to dispute
If you find the bank information contained on the ChexSystems report is inaccurate and containing errors, then you have the rights to dispute ChexSystems errors. You can submit a dispute with ChexSystems or the bank or credit union responsible. Still, it is best to start the dispute process with ChexSystems so that they can handle the dispute investigation on your behalf. To begin the ChexSystems dispute process, you can submit your dispute a few different ways:
- Visit the ChexSystems website and submit the dispute using the ChexSystems online form. You will have to enter personal information and answer questions. It is also essential to attach documentation to your dispute, supporting your argument that the information listed on your ChexSystems report is wrong.
- Print out the PDF dispute form from ChexSystems, fill it out, and attach supporting documentation to the dispute (make sure to send copies, not originals) and send by certified mail to Chex Systems, Inc. Attn: Consumer Relations, 7805 Hudson Road, Suite 100 Woodbury, MN 55125.
- Print out the PDF dispute form from ChexSystems, fill it out, and attach supporting documentation to the dispute (make sure to send copies, not originals) and send by fax to (602) 659-2197.
Once ChexSystems receives your request to dispute the information, they will start their investigation with the bank information listed on your report. ChexSystems investigations can take approximately 30 days to complete (21 days if you live in Maine). If you submit additional documentation to ChexSystems while they are still investigating the dispute with a bank, then an additional 15 days may be added to the investigation of your dispute. Don’t provide ChexSystems more information with the dispute then they ask for unless the documentation you provide will help clear your record with the bank. The results of your ChexSystems dispute and the investigation will be sent to you by mail.
ChexSystems Investigation Process
ChexSystems is required by law to complete their investigation of your dispute within the 30 days allotted time frame. Depending on the outcome of the investigation of your dispute, you may want more proof on how ChexSystems reached their decision on your dispute and who they verified the information with. You can send another certified letter to Chex Systems requesting that they send you the information regarding your disputes.
If ChexSystems is unable to verify how they concluded their investigation on your dispute with proof, then ChexSystems is in violation of the FCRA and is required by law to delete the errors. They may do this by notifying you or not responding regarding your dispute. Send another certified letter by strongly requesting that they eliminate the information due to a lack of verification and proof from the dispute that it should be on your ChexSystems report.
Another step you can take when you don’t receive the desired outcome of the investigation on your dispute within the 30 days or there is a lack of proof, try reaching out to dispute directly with the bank or credit union that reported the misinformation. Banks and credit unions are also required by law to complete their investigation within 30 days of your requested dispute. You may be able to work out a deal on your dispute with the bank or credit union with a negotiation that you will pay your old debt if they delete it from your ChexSystems report. Make sure that you get any agreements made in writing, and that all letters mailed are sent certified regarding disputes.
Bankruptcy and ChexSystems
If your bankruptcy included old debts unpaid to a credit union or bank and your account abuse or suspected fraud listed on your ChexSystems report seems to have resulted from financial burden, you could have your ChexSystems report cleared. Mail certified or fax a copy of your bankruptcy discharge or finalized documents from your attorney as a dispute to ChexSystems with the request to have your record removed.
Legal Action is the Last Resort
After you have followed all the steps to dispute errors on your ChexSystems consumer reports with no successful outcomes within the 30 days, you may have to take one more action by taking ChexSystems to small claims court. If the information is a legitimate error and you have been good at documenting the whole process, keeping certified mail read receipts, payment records, and more, then you may be successful with taking legal action. In most cases, it shouldn’t result in a drawn-out court battle as long as you have good reason to be suing ChexSystems regarding your disputes. Your claim should be settled quickly with an agreement to have the inaccurate information deleted off of your ChexSystems report.
If All Else Fails, Pay Your Debts and Enroll in Second Chance Checking Accounts
All hope is not lost if you are unable to have a successful dispute of inaccurate information with ChexSystems. Know these few things:
- Make sure that all debts owed to your past credit union or bank are paid in full. Having a ChexSystems report that shows no liabilities with a collection agency, paid in full, is a much better sell to a bank or credit union when it comes to opening a bank account.
- Reported poor banking history that lists account mishandling and paid debts should be removed after 5 years from your file.
- There are many second chance checking accounts available that have a lot to offer to someone with a ChexSystems report. For the most part, these checking accounts only require that no fraud is listed on your report and that all unpaid balances are paid in full.
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