Banks will still open accounts for you, but you need to know which ones and what ChexSystems actually says about you

A negative ChexSystems report does not lock you out of banking permanently. ChexSystems is a checking account history database that banks use to decide whether to open accounts for you. If you have unpaid overdrafts, a history of bounced checks, or fraud allegations on your record, banks see that report and often decline. But many banks and credit unions do not check ChexSystems at all, and others will open accounts for people with marks on their report if you meet their other requirements.

The first step is to find out what ChexSystems actually says about you. You have the right to a free copy of your report once per year, and you may find the information is incomplete, outdated, or wrong. Once you know what you are dealing with, you can target banks that either do not use ChexSystems or that have programs specifically for people in your situation.

Key Takeaways

  • You can request your ChexSystems report for free at ChexSystems.com/consumer or by mail, and you should check it before explore anywhere.
  • Many banks and credit unions do not use ChexSystems at all, including some large national banks and most community credit unions.
  • Second-chance checking accounts are designed for people with ChexSystems marks and usually have lower fees and smaller opening deposits than standard accounts.
  • If ChexSystems has incorrect information about you, you can dispute it in writing and the company must investigate within 30 days.
  • Opening an account at a bank that does not use ChexSystems is often faster than waiting for old marks to age off your report.

Getting a copy of your ChexSystems report

Go to ChexSystems.com/consumer and select "Request Your Report" to order your report online. You can also call 1-800-428-9623 or mail a request to ChexSystems, 7618 LBJ Freeway, Dallas, TX 75251. The report is free once per year. ChexSystems will mail it to you within five business days, or you can view it when ready online if you request it through their website.

Read the report carefully. It will show any accounts you opened and closed, overdrafts or unpaid fees, returned checks, and any fraud or misuse allegations. Some reports contain errors — a closed account listed as unpaid when you actually settled it, or activity from an account you never opened. Write down anything that looks wrong.

Disputing incorrect information on your ChexSystems report

If your report contains errors, you have the right to dispute them. Send a letter to ChexSystems at the address above, describe what is wrong, and include copies of any documents that prove it — a bank statement showing you paid the overdraft, a letter from the bank confirming the account was settled, or proof that you did not open an account listed on your report.

ChexSystems must investigate your dispute within 30 days and contact you with the results. If they find the information is wrong, they will remove it. If they cannot verify the information, they must remove it as well. Keep copies of everything you send and note the date you mailed it. If ChexSystems does not respond within 30 days, send a follow-up letter.

Banks and credit unions that do not use ChexSystems

Many financial institutions do not check ChexSystems at all. Large national banks that typically do not use ChexSystems include Chime, LendingClub, and some branches of regional banks. Most community credit unions do not use it either, especially if they are smaller or serve a specific geographic area or community. Call ahead or check the bank's website before you go in — look for language like "second-chance banking" or "we do not use ChexSystems."

Credit unions are often a better option than banks if you have ChexSystems marks. Credit unions are member-owned and tend to have more flexibility in their account decisions. You may need to join the credit union first — membership often costs nothing or a small one-time fee — and then open an account. Ask whether membership requires you to live in a certain area, work for a certain employer, or belong to a certain group. Many credit unions have opened their membership to anyone in a broad geographic region.

Second-chance checking accounts

Some banks offer second-chance checking accounts specifically for people with ChexSystems history. These accounts have higher fees than standard checking — often a monthly maintenance fee of $10 to $15 — and may require a larger opening deposit. But they are designed to accept people who would be turned down elsewhere, and they report your account activity to ChexSystems, which means good behavior on your part will eventually improve your report.

Ask your bank whether they offer a second-chance program. If they do, ask what the monthly fee is, what the opening deposit is, and whether there are fees for overdrafts or returned checks. Some second-chance accounts charge $30 or more per overdraft, so understand the full cost before you open one. The goal is to use the account responsibly for six months to a year, then move to a standard account with lower fees once your ChexSystems report shows positive activity.

What to bring when you explore

Bring a government-issued photo ID, proof of your current address (a utility bill, lease, or mail from a government agency dated within the last 60 days), and your Social Security number. Some banks will also ask for a second form of ID or proof of income, though this varies. Call the bank before you go in and ask what documents they need — this saves a trip if you are missing something.

If you are opening an account at a credit union, you may also need to show proof that you meet their membership requirements. If membership is based on where you live, bring a lease or utility bill. If it is based on where you work, bring a recent pay stub or a letter from your employer.

How long negative marks stay on your ChexSystems report

ChexSystems keeps records for five years from the date of the incident. An unpaid overdraft from three years ago will still appear on your report, but one from six years ago will not. This does not mean you have to wait five years to open an account — you can open one now at a bank that does not use ChexSystems or through a second-chance program. But it does mean that if you want to move to a standard account at a bank that does check ChexSystems, you may have to wait until the old marks age off.

The exception is if you settle an unpaid debt. If you owe a bank money from an overdraft or unpaid fees, contact them and ask what it will take to settle the account. Once you pay, ask them to confirm in writing that the account is closed and settled. This does not remove the mark from ChexSystems when ready, but it shows future banks that you resolved the problem.

Building a positive ChexSystems history

Once you open an account, use it responsibly. Deposit money regularly, keep your balance above zero, and avoid overdrafts. Every transaction you make — deposits, withdrawals, transfers — is reported to ChexSystems. After six months to a year of good account behavior, your report will show a pattern of responsible use. This makes it easier to move to a standard account at a bank that does check ChexSystems, or to open additional accounts elsewhere.

If you do overdraft your account, pay it back when ready. The longer an overdraft sits unpaid, the worse it looks on your report. If you cannot pay it right away, contact the bank and ask about a payment plan. Many banks will work with you if you show you are trying to resolve it.

Frequently Asked Questions

Will opening a new account hurt my credit score?

No. Opening a checking or savings account does not affect your credit score at all. ChexSystems is separate from credit reporting agencies like Equifax and TransUnion. A bank may check your credit report when you open an account, which does create a small temporary dip, but the account itself does not count toward your credit.

Can I open an account online if I have ChexSystems marks?

Some online banks do not use ChexSystems and will let you open an account entirely online. Others do check ChexSystems and will decline you online. If you want to open an account online, look for banks that explicitly state they do not use ChexSystems or that offer second-chance accounts. Call their customer service line first to confirm they will accept you.

How long does it take to open an account?

If you go to a bank branch in person with the right documents, you can usually open an account the same day. Online applications can take one to three business days. If the bank needs to verify information or if there is a hold on your ChexSystems report, it may take longer.

What if a bank says I have to pay old overdraft fees before they will open an account?

Some banks require you to settle old debts before opening a new account with them. If this is the case, ask whether you can set up a payment plan. If you cannot pay, try a different bank — many will open an account for you without requiring you to settle old debts first. Once you have an account open and are building positive history, you can address old debts separately.

Does ChexSystems report positive account activity?

Yes. ChexSystems records both negative and positive information. If you keep your account in good standing, make regular deposits, and avoid overdrafts, that activity appears on your report. After several months of positive behavior, banks that check ChexSystems will see that you have improved and may be more willing to work with you.