What is ChexSystems?
Most of us understand the basic concept of the American credit system and how it functions. Whenever you apply for a new loan or credit card, it is normal for the lender to look at your creditworthiness and debt history by obtaining your credit score. Banks access this credit score from certain credit reporting agencies known as credit bureaus. In the United States, the three primary credit bureaus that lenders use are TransUnion, Equifax, and Experian.
In addition to the three major credit bureaus, there is also a consumer reporting agency called ChexSystems.
ChexSystems, sometimes miswritten as “CheckSystems”, functions like the credit bureaus in many ways. However, ChexSystems focuses more on your past savings and checking accounts rather than your debt accounts and repayment history. Roughly 80% of banks in the United States will screen their applicants through ChexSystems before approving a new deposit account. You can visit the official ChexSystems website at www.chexsystems.com. Early Warning Services (EWS) and TeleCheck are two similar but less utilized agencies.
When the three credit bureaus each generate a credit score for you, it is possible that it will be a positive thing for you. The higher your credit score is, the lower your interest rate will be when borrowing money. That is why you want to get your name in the system and establish a responsible credit history.
Unfortunately, this is not the case with ChexSystems because all it does is report bad news. Since they only track negative history about your deposit accounts, they will only generate a negative score for your report. It is kind of like how the police and the federal government have a criminal records system which keeps records on people who’ve committed crimes. The only record you could have in such a system is a bad record. ChexSystems works in a similar fashion.
Therefore, it is best to not even have a score with ChexSystems. Sadly, this is difficult to achieve because it only takes one mistake for your name to be recorded in their system. For instance, if you bounced a check, had an overdraft, or failed to pay any of your banking fees in the past, then you would have a negative record on ChexSystems. Each negative record will decrease your ChexSystems score, which can be anywhere between 100 and 899. Obviously, a credit score closer to 100 means it is a bad score.
24 Banks That Don’t Use ChexSystems
The fact that nearly 80% of American banks use ChexSystems doesn’t mean it is impossible to open a new deposit account if you have a low score in their system. What about the other 20% of banks which don’t use ChexSystems? You could always go to one of them, right? These banks might still run a credit check on you with the three main credit bureaus, or with TeleCheck or Early Warning Services, but they won’t run a ChexSystems check. There are also banks that might check your ChexSystems report, but they won’t base their final decision on it.
If you have a negative report and you want to apply for a checking or savings account, then consider applying at one of the non-ChexSystems banks below. The following is a list of the 24 banks that don’t use ChexSystems, updated for this year:
Chase Bank: Chase Total Checking
- $12 monthly service fee OR $0 with 1 of the following each monthly statement period:
- Direct deposit totaling $500 or more made to this account
- OR a $1,500 or more minimum daily balance in this account
- OR an average daily balance of $5,000 or more in any combination of qualifying linked deposits/investments
- $0 minimum deposit to open
TD Bank: TD Convenience Checking
- Monthly fee: $15 or $0. Waive your monthly fee with a $100 minimum daily balance
- Earn $150 when you have $500 in qualifying direct deposits within 60 days.
- $0 minimum deposit to open
U.S. Bank: Easy Checking
- Monthly Maintenance Fee: $6.95
- Waive Monthly Maintenance Fee: Combined monthly direct deposits totaling $1,000+ OR An average account balance of $1,500+ OR Account holder(s) age 65 or greater
- $25 minimum deposit to open
Axos Bank: Essential Checking
Regions Bank: LifeGreen Checking Account
Acorns: Acorns Spend
SunTrust Bank: Essential Checking
GO2Bank: GO2Bank Mobile Bank Account
Fifth Third Bank: Express Banking
Chime Bank: Chime Account
Empower Finance: Checking Account
Renasant Bank: Renasant Checking
United Bankshares: United Free Checking
Southwest Financial: Checkless Checking
First National Bank Texas: Power Checking
TCF Bank (now Huntington): Free Checking
Varo Bank: Online Checking Account
FSNB: Basic Checking Account
BancorpSouth: My Way Checking
USAA Bank: Classic Checking
Navy Federal Credit Union: Free EveryDay Checking
Langley Federal Credit Union: Essential Checking
TD Ameritrade: Brokerage Account
BBVA Bank: Online Checking
How to Request Your ChexSystems Report or Score
ChexSystems is owned by Fidelity Information Services (FIS) and is subject to the Federal Fair Credit Reporting Act. Every 12 months, or whenever you are turned down when opening an account, you have the right to request a free copy of your ChexSystems report. You can do so online via this link, by calling 800-428-9623, or offline by mailing or faxing this form.
However, this free report will not have your actual ChexSystems 100 to 899 score. At the present time, you cannot find out your score online. To receive a written copy of your score, mail or fax this completed form to the address and number listed on the document. You can also download the form here.
How Long Does It Take to Get Out?
Negative records are kept in the ChexSystems database for a period of 5 years.
You can submit a dispute online to get any incorrect information out of your report. In addition to submitting your dispute online, you can also mail or fax your dispute. You should also contact the bank that reported the info, as they can also request removal of the information.
Second Chance Checking Accounts
If you are unable to get approved for an account with any of the above non-ChexSystems banks, your best backup plan is a “second chance” account. Second chance checking accounts are specifically designed for people who can’t get approved for a regular account due to bad credit or a low ChexSystems score.
Because banks believe these account holders are a greater risk, second chance accounts come with restrictions and higher monthly fees. Account limitations may include no debit card and no overdraft protection. So the fees and restrictions don’t come as a surprise, be sure to read the fine print when you sign-up. Here are banks that offer second chance accounts for people with bad ChexSystem records:
- Wells Fargo: Clear Access Banking
- PNC Bank: Foundation Checking
- Netspend: All-Access Account
- Excite Credit Union: Fresh Start Checking
- Woodforest National Bank: Second Chance Checking
- GTE Financial: Go Further Checking
- East West Bank: Community Checking
- OneUnited Bank: U2 E-Checking
- Axiom Bank: Opportunity Account
- Radius Bank: Essential Checking
- First American Bank: Fresh Start Checking
- Bank of Texas: Opportunity Banking
- Bank OZK: Pathway Checking
- Centennial Bank: Opportunity 100 Checking
- Landmark National Bank: New Start Checking
- Republic Bank: Checking Builder
- MemoryBank: Memory Builder Checking
- City National Bank: Bounce Back Checking
- BBVA Bank: Free Checking
Does Chase Use ChexSystems?
No, Chase does not use ChexSystems.
Does Wells Fargo Use ChexSystems?
No, Wells Fargo does not use ChexSystems.
Does Bank of America Use ChexSystems?
Yes, Bank of America uses ChexSystems.
Does Capital One Use ChexSystems?
Yes, Capital One uses ChexSystems.
Does PNC Bank Use ChexSystems?
No, PNC Bank does not use ChexSystems.