Your ChexSystems Report – What It Is, Where to Get Yours, and Why It Is Important

What is a ChexSystems Report?

ChexSystems is a consumer reporting agency that stores and reports information on consumers who mishandle their financial accounts.  This doesn’t mean mishandling in the sense of paying your bills late or being irresponsible about seeing them paid on time, but actual fiduciary mishandling; an example of something ChexSystems tracks are bank accounts closed while the balances are in the negative.  

They then report on these individuals to financial institutions, who are the actual clients of ChexSystems.  Usually, these institutions will use this information to prevent these individuals from opening further accounts, however other institutions regularly deal with ChexSystems and may have access to information gathered by them, such as credit card and insurance companies.  They are not a credit bureau per se, though parts of the Fair Credit Reporting Act and other laws do cover them.

Once information has been reported, it will stay on file for up to five years, unless the source of the information requests that it be removed (which institutions will sometimes do if you settle up on the fees and charges which caused the overage in the first place), or they are obligated to remove it for a legal reason.

How Can I Get My ChexSystems Info?

An individual is able to order their ChexSystems report quickly and easily online, from the company website.  One thing that it is important to remember is that a person can only get a ChexSystems report for themselves.  You cannot order it on behalf of a spouse or loved one.  The only exception to this is if you are in possession of a notarized Power of Attorney or other document composed or signed by the specific individual in question which authorizes disclosure.  No compromises can be made as this is a matter of Federal law.

Once in possession of your report, take a look at it and be sure the information is accurate.  Double check personal information such as driver’s license number, account number, or social security number, to be sure everything matches up.  Also take a look at any negative items on the report.  You are entitled to file disputes with ChexSystems if you believe items are inaccurate (a link to begin the dispute process is also found on their site).  You are also entitled to add a statement which describes the nature of any dispute if you wish to.

What Can I Do If I Am On the List?

Being in the ChexSystems database isn’t the end of the world.  While it can certainly make things difficult in the short-term, there are ways to get around most of the issues a negative report can cause.  For example, you can:

  • Deal with non-ChexSystems Banks – Not every financial institution is a member, with a little effort you can find one that doesn’t use the service.
  • Second-change checking accounts – Most financial institutions offer second-chance checking accounts; as long as you can live with the restrictions they have on funds availability they work exactly like regular accounts.
  • Prepaid debit card programs – For people with relatively simple financial circumstances, they may be able to replace the need for a checking account entirely through the wise use of prepaid debit card programs.

Other Important Information to Consider

It is always a good idea to have as much information as possible about your financial circumstances, particularly when you are considering making decisions that can have a major impact on your finances or your life.  Above and beyond making sure that you are in good standing with ChexSystems, you should also regularly consult with the Big Three credit bureaus (Equifax, Experian, and TransUnion) to make sure that your credit score is healthy and being reported accurately.  Regularly getting copies of and monitoring your credit bureau reports and your ChexSystems status is a great way to ensure that you will have an accurate picture of your personal finances at any given time.