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What is ChexSystems, and how do you find out if you're listed?

Banks rely on ChexSystems reports when you apply for an account to find out if you’ve had issues in the past.

Yahoo Personal Finance· Getty Images
Sarah C. Brady
·Contributor
6 min read

Have you ever overdrafted your checking account or accidentally bounced a check? If so, a record of the mishap could be following you around.

When you have a problem managing a bank account, your bank usually reports the incident to a company called ChexSystems. And if you have negative information in your ChexSystems file, you might have trouble opening a new bank account within the next few years.

Chex Systems, Inc., or ChexSystems, is a company that collects information about your checking and savings account activity and assembles it into a report. Your Consumer Disclosure Report, more commonly referred to as a ChexSystems report, has details of your past banking problems, including issues such as involuntarily closed accounts or unpaid bank fees. These items stay in your file for five years.

When you apply for a new bank account, most banks and credit unions pull your ChexSystems reports to learn about your banking history and determine if you're too risky to approve. If you have negative information on your file, you might find it difficult to open a new account.

ChexSystems reports hold information about your history with bank accounts over the past five years. This includes any information that's been reported to ChexSystems by your bank or by merchants who've had trouble processing your checks or debit card payments.

Unlike credit reports, ChexSystems reports do not include debt-related activities such as loan payments or credit card balances. Instead, here's what you can find in your ChexSystems report:

  • Identifying information: Your Social Security number, driver's license number, and any contact information connected to your past bank accounts.

  • Account history: Checking and savings account applications and the dates your accounts were opened and closed.

  • Account misuse: Negative reasons for account closures, such as suspected fraud or insufficient funds, and whether you've paid the money owed in connection with the accounts.

  • Check activity: Checks you've ordered and any bounced checks.

Every consumer is entitled to pull one free ChexSystems report and score per year, but you can pull additional copies if you're denied a new bank account based on the information in your report.

You can request your Consumer Disclosure Report from ChexSystems by logging in at ChexSystems.com or by filling out their Registration Form to create a new account. To complete the request, you might have to verify your identity by confirming the following information:

  • Social Security number

  • Driver's license or state identification

  • Current or previous addresses

Having a ChexSystems report doesn't mean you're shut out of banking forever, but it might be difficult to open a new account. Fortunately, the solution could be fairly simple, depending on your situation.

If you have inaccurate information in your ChexSystems report, you have the right to file a dispute and get it fixed or removed. Disputes can be filed with ChexSystems and with the company that furnished the information to ChexSystems. Usually, the furnisher is the bank, but it may also be a retailer you had trouble with in the past.

Check and see if there are any items on your report you can resolve. If you have an outstanding bank debt, for example, you might want to pay it off and then ask the bank to update the information or remove it.

The account will likely remain on your report until it reaches the five-year fall-off date, but it should reflect that money is no longer owed. As a result, you'll find it easier to meet some banks' qualifications to open a new account.

Some credit unions and banks offer "second chance" accounts designed specifically for people with a negative banking history. Depending on the financial institution, you could be approved if your unpaid bank debt is below a certain dollar amount, if you only have one outstanding bank debt, or if you have no history of fraud on your report.

While second-chance bank accounts usually have limited services and features, your positive activity with the new account can be added to your ChexSystems report and help you qualify to open a regular account or convert your second-chance account in the future.

For some people, the only way to get banking access within five years of a negative event could be to become a joint account holder on someone else's bank account. Depending on the bank's policies, the account owner may be able to designate you in one of these roles:

  • Authorized signer: You don't own the account, but you have the ability to sign checks and withdraw money.

  • Authorized user: The account owner can grant you access to pay bills from the account or transfer money to another account at the same bank.

  • Joint owner: You're an equal owner and you have full use of the account, even after the other owner passes away.

For the primary account owner, it's important to carefully consider whether you want to give anyone access to your bank account. Before making this move, consider reviewing the person's ChexSystems report and discussing their plan for remedying bad banking habits.

While most financial institutions review your ChexSystems report before approving you for an account, some don't. Here are a few places to look:

  • Chime's Second Chance Banking accounts

  • Credit Union of Southern California's Aspire Checking

  • SoFi's Online Checking Account or High-Yield Savings Account

  • Varo Bank's Online Bank Account (checking), Online Savings Account, or High-Yield Savings Account

  • Wells Fargo's Clear Access Banking (checking)

Note that some banks check another type of report called an Early Warning Services (EWS) report. To find a bank with flexible requirements, regardless of which reports they pull, try searching for a second-chance account through a bank or credit union.

You can find out if you have a ChexSystems file by requesting your Consumer Disclosure Report at ChexSystems.com.

Accurate information can't be removed from your ChexSystems report before five years. However, you can get errors fixed or removed from your report by disputing them. If you pay off bank debt, the status of the account on your ChexSystems report can also be updated to "paid."

Information stays in your ChexSystems file for five years after it's reported.