Best Non-ChexSystems Bank Accounts 2019

To put it simply, ChexSystems is a credit check used to determine your eligibility to open a bank account. Thousands of ordinary working people fail this credit check everyday and are unable to open a bank account – even if they wish to rectify any past mistakes. As a result, we have listed the best bank accounts that avoid this check so you can open an account and keep banking, regardless of your credit history.

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Most people have not heard of ChexSystems despite the fact that it affects nearly everyone. It normally only comes to people’s attention when they discover they have been listed on it and at this point it becomes very important to understand exactly what it is and the repercussions of having a ChexSystems record.

What is ChexSystems?

ChexSystems is an agency that has two jobs, to verify checks and credit reporting. Nearly all banks in the US use ChexSystems when making decisions about whether to allow a new customer to open an account with them.

If a person is listed on ChexSystems it means that they have done something to draw attention in a negative way. Most often, this will be a minor infringement, such as forgetting to pay a fee on time, but of course, they also list you for criminal activity such as fraud. Unfortunately, regardless of the reason, if you are listed on ChexSystems then there is a good chance that a bank will refuse to allow you to open a checking account.

What Goes into a ChexSystems Report?

Unlike credit bureaus, ChexSystems collects information about your checking account history. The reports contain information to identify you, such as your Social security number and past addresses. It will have details of any unpaid negative balances, including overdrafts and accounts that have been closed involuntarily. It will also include information on unpaid fees, fraudulent activity, account inquiries and applications for other bank accounts, and other public records. What it won’t contain is details on if you have bad credit.

The report will also contain a risk score. The ChexSystems Consumer Scores range from 100 up to 899. The higher your score the better, as it shows that you are a less risky customer.

The good news is that ChexSystems reports will normally only keep negative information on record for five years. However, each bank will have its own rules about how much time must pass after a negative incident before you can open a new bank account.

Checking Your ChexSystems Report

Thanks to the Fair Credit Reporting Act, you are able to request one free copy of your checking account report from ChexSystems each year. You are also able to request a free copy of a ChexSystems report that has been used to deny you a new account. As a result, you can keep track of your ChexSystems report and gain insight into the reasoning behind a bank’s decision.

Disputing Your ChexSystems Report

If you have requested your report and found errors or been denied a bank account due to an erroneous report then the good news is that you can dispute the report. You need to file disputes with both the bank and ChexSystems. Both of them will then investigate your claim and correct any mistakes.

What To Do If You are Denied an Account

If your report was correct and you have been denied an account then you may be feeling very worried. However, while being denied a bank account because of your banking history can certainly be extremely irritating, it is far from the end of the world.

What you should not do in this situation is to start going blindly from bank to bank trying to open an account. Over 9,000 banks (which means over 100,000 branches) in the US use ChexSystems to make their decisions. In other words, 80% of all American banking institutions make use of ChexSystems.

However, if you look at this the other way round, it means that 20% of all banking institutions are not using ChexSystems. Plenty of banks will allow you to open an account with no credit check and without first looking at your ChexSystems report.

Banks That Do Not Use ChexSystems

The easiest thing to do if you have a negative ChexSystems report is to look for a bank that does not refer to ChexSystems.

You should be aware that some banks that do not use ChexSystems do look up other records, such as TeleCheck and Early Warning System (EWS). However, it is possible to find banks that do not look at any of these records.

The banks that choose not to use ChexSystems reports will be aware that many of their customers have negative reports. However, they choose to take a broader view of things and they are aware that a customer’s situation may have changed. Someone who made a genuine mistake or was going through a hard time may now be a very reliable customer.

Thanks to this, there is a very good chance that you will still be able to open a checking account with one of these banks. Furthermore, these banks are in no way inferior to ChexSystems banks. They offer the full range of services including numerous types of checking accounts, personal loans, mortgages, insurance and so on. There are many banks that do not refer to ChexSystems, so be sure to look around carefully to find the best bank for you.

An option often put forward for those with negative ChexSystems reports is a Second Chance Bank Account. These are exactly what they sound like, accounts designed to give people a second chance. However, they often have many disadvantages. Second Chance Bank Accounts usually have unavoidable monthly fees, lower withdrawal and debit limits, no overdraft facilities, and no check writing. Because of this, a bank that doesn’t use ChexSystems is far preferable.

Conclusion

For some people ChexSystems is a hidden menace that can lead to them being denied a straightforward checking account, which can make life extremely difficult. A small and genuine mistake can result in a negative ChexSystems report and it can then come back to haunt you for years to come.

However, people who have negative ChexSystems reports have plenty of options. There are numerous high quality banks that do not depend on ChexSystems and will happily open accounts. Many of these banks offer excellent checking accounts for all people, from the most basic of accounts to high interest checking accounts for those with high balances.

If you discover that you have a negative ChexSystems report then do not worry. Take some time to research your options and you are sure to find an alternative bank quickly and easily.