Checking accounts make it easy and safe for you to pay for almost anything without having to keep lots of cash and worrying about losing your money. There are, of course, alternatives to checking accounts (such as bad credit bank accounts)for people who have had Chexsystems problems; however, most Americans prefer to have checking accounts. Learn how checking accounts work in this article.

Banks Have Different Types of Accounts

When you open an account at a bank, you can set up different types of accounts. Different accounts at banks include savings accounts and checking accounts. Savings accounts are for saving your money. You deposit money in your savings account to keep it save. Nobody can get your money from your saving account. But Checking Accounts let you put money in the account, and then write checks, to stores or people, to pay for things. The stores or people then give the check to your bank and your bank will take the money from your checking account and pay the store or person you gave the check to.

Why Use A Checking Account?

Keeping a lot of cash with you or at your home can be dangerous. What if you loose your money, or someone robs you? Sometime when people send cash in the mail, people steal that too. A checking account allows you to use checks to pay for things. So instead of using cash, you can pay with a check. Checks are safe to use in the mail as well, because only the person you write the check to can cash the check for money. When a store or person \’cashes\’ a check, it means they take your check to the bank to get cash for the check. You must make sure you have enough money in your checking account to pay for all the checks you write.

What Is A Check?

A check is the special piece of paper the bank gives you use with your checking account. When you give someone a check, the person or store you give it to takes the check to a bank, and can get cash. A check is printed on special security paper. That means that only official checks can be used to take money from your account. This is a safety feature that makes your checking account safer. A check has a place for you to write in the date, who you want to give the check to, and the amount of the check. There is also a place for your signature. When you open your checking account at the bank, they will take a copy of your signature. Then when someone gives them a check for your account, they make sure that your real signature is on the check. This makes sure that only you can write a check for your checking account.

How Does A Check Work?

You may notice on the bottom of your check a set of numbers. These numbers are unique to your checking account! These numbers are a code that tell what bank your account is at, and what your account number is. Stores or people you give checks to do not need to go to your bank to cash your check. They can give it to any bank, and the bank uses the numbers on the bottom of your check to send it to your bank. When the check arrives at your bank, your bank takes the money from your checking account and sends it to the bank where the store or person cashed the check. This makes it easy for you to pay people anywhere with a check, and it makes it easy for stores or people to cash your check at any bank.

Checking accounts make it easy and safe for you to pay for almost anything without having to keep lots of cash and worrying about losing your money.

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Opening a checking account with bad credit does not mean you will have difficulty getting approved if you failed to pay an emergency room bill or have been late with your credit card payments. Your credit bureau history is seldom checked. Banks rely on agencies that report on banking history instead. The two largest such agencies are ChexSystems and TeleCheck. If your last checking account was fraught with overdrafts or if the bank chose to close the account, you can assume that it was reported to one or both of these services. When you apply for a new account, the bank will obtain the report; while each bank has its own policy regarding approval, few will open a new checking account if there is a consistent history of problems. However, some banks offer what they call second chance banking, and if your report shows only one bad account, they will often approve opening a checking account.

If, however, you actually need a fourth or fifth chance at banking, don’t despair. There are many sources for opening a checking account with bad credit.

Types of Bad Credit Checking Accounts

Most prepaid credit cards are actually checking accounts without the checks. You can have your payroll checks or government payments deposited into your account each pay day. You can also have your tax refunds applied with direct deposit, and most will allow you to deposit funds you have withdrawn from your Paypal account. To access your funds, you receive a debit card you can use to withdraw cash from an ATM or make purchases at the store. Fees are usually quite low for these accounts, and it is extremely rare for anyone to be denied.

Some bad credit checking accounts are more lenient in that they allow you to actually write checks as well as have a debit card. These can be a little more difficult to find, but they are definitely an option. Many will even provide your personalized checks at no cost to you.

Business bad checking accounts are available as well as personal ones. Not every institution offers every type of account, and you will have to evaluate the features and your needs. It may be preferable to have both accounts with the same firm, but you may also find that in some cases you will do better to use two different institutions.

How to Find a Bad Credit Checking Account Online

The easiest way to find a bank account for bad credit online is to locate a website that lists a variety of institutions that provide the service. They show multiple possibilities, and you can compare the fees and features to narrow down your choices. Once you have selected a likely source, you can go directly to their website to apply.

You will normally be approved instantly, contingent upon funding your account. You will also be required at some point to enter identifying information, such as your social security number, which can be verified. Only a handful will insist that you fax them a copy of your driver’s license.

Points to Remember about Opening a Checking Account with Bad Credit

• Typically, you must be over the age of 18.
• You cannot use a PO Box to receive your debit card or checks.
• You must provide the identification required by the bank before your approval is finalized.
• Many institutions will not accept mail in deposits.
• Compare all features and fees before selecting an account.
• Some accounts have a maximum amount per direct deposit or per card.
• Consider how you will use your account when selecting a fee plan. For example, if you will be making a lot of debit card purchases, it may be more economical to purchase a monthly plan that allows unlimited purchases with no transaction fees.

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Bad credit, when the term is used to refer to bank accounts, has little to do with your credit score and everything to do with how you have handled bank accounts in the past. While bounced checks and closed accounts can appear on your credit history, banks seldom check that information when deciding whether to open an account. Instead, the majority of them request a report from an agency that reports on bank related incidents. The two most commonly used are TeleCheck and ChexSystems. If you want to check your status, you can request reports from either or both, and you are allowed one report per year from each agency. Negative reports from these agencies usually mean that you need to know how to open a bank account with bad credit.
Finding Bad Credit Accounts at Local Banks

Bad credit bank accounts are sometimes called second chance banking. This is the term most commonly used by your local banks. The exact requirements will vary between banks, but generally they do not like to see a steady history of banking problems. However, if you have only had one account showing returned checks or that was closed due to overdraft fees, you have a good chance of being approved for one of these accounts.

You will need to determine which banks in your area offer bank accounts for bad credit. You can make a list of those convenient to your home, and then either call them or go online and check their websites to see if they offer second chance banking. Most of them will let you apply online, and you typically receive an answer within minutes.

Finding Bad Credit Accounts Online

Many institutions that offer bad credit accounts online do not have physical locations where you can make deposits. You normally need to fund these through direct deposits. Most will allow you to deposit not only your payroll check or government payment, but also any tax refunds you receive. You can usually deposit funds from your Paypal account as well.

Some of these accounts only issue a debit card for you to use to access your money. However, a few allow you to write checks as well as access funds with an ATM card or make purchases with a debit card.

If you know the name of a specific institution you want to investigate, you can go directly to their website. Otherwise, just do a search for bad credit bank accounts and visit a few to see what fees and conditions apply. The easiest way, however, is often to visit a portal that features numerous providers of bad credit accounts. There you can quickly compare features and select the ones that offer the best account for your situation. Such portals should not be confused with agents who “guarantee” to find a bank account for you. They will charge you a fee, which is not applied to your balance. Typically, their guarantee applies only to their fee, meaning that they do not promise to find you an account, only that they will refund the fee if they cannot.

How to Apply for a Bad Credit Bank Account

If you are applying in person, find out whether you need to make an appointment. Then, when you go, take the following items with you:

• Primary proof of identity, such as a passport, driver’s license, or ID issued by your state;
• Secondary proof of identity, such as a Social Security card or a credit card with your name on it;
• Proof of address if the address on your primary ID has changed;
• Your employer’s name, address, and phone number;
• Funding (either cash or checks) to make your initial deposit.

If you are applying online, you will need to fill in the applicable numbers from the proof of identity documents shown above along with your employer’s information. Your acceptance is generally contingent upon receiving your initial deposit, and some institutions may ask you to fax copies of your ID to them. If the bank has a branch in your area, you may be asked to go in to prove your identity and sign your signature card in person. Bad credit, when the term is used to refer to bank accounts, has little to do with your credit score and everything to do with how you have handled bank accounts in the past. While bounced checks and closed accounts can appear on your credit history, banks seldom check that information when deciding whether to open an account. Instead, the majority of them request a report from an agency that reports on bank related incidents. The two most commonly used are TeleCheck and ChexSystems. If you want to check your status, you can request reports from either or both, and you are allowed one report per year from each agency. Negative reports from these agencies usually mean that you need to know how to open a bank account with bad credit.

Finding Bad Credit Accounts at Local Banks

Bad credit bank accounts are sometimes called second chance banking. This is the term most commonly used by your local banks. The exact requirements will vary between banks, but generally they do not like to see a steady history of banking problems. However, if you have only had one account showing returned checks or that was closed due to overdraft fees, you have a good chance of being approved for one of these accounts.

You will need to determine which banks in your area offer bank accounts for bad credit. You can make a list of those convenient to your home, and then either call them or go online and check their websites to see if they offer second chance banking. Most of them will let you apply online, and you typically receive an answer within minutes.

Finding Bad Credit Accounts Online

Many institutions that offer bad credit accounts online do not have physical locations where you can make deposits. You normally need to fund these through direct deposits. Most will allow you to deposit not only your payroll check or government payment, but also any tax refunds you receive. You can usually deposit funds from your Paypal account as well.

Some of these accounts only issue a debit card for you to use to access your money. However, a few allow you to write checks as well as access funds with an ATM card or make purchases with a debit card.

If you know the name of a specific institution you want to investigate, you can go directly to their website. Otherwise, just do a search for bad credit bank accounts and visit a few to see what fees and conditions apply. The easiest way, however, is often to visit a portal that features numerous providers of bad credit accounts. There you can quickly compare features and select the ones that offer the best account for your situation. Such portals should not be confused with agents who “guarantee” to find a bank account for you. They will charge you a fee, which is not applied to your balance. Typically, their guarantee applies only to their fee, meaning that they do not promise to find you an account, only that they will refund the fee if they cannot.

How to Apply for a Bad Credit Bank Account

If you are applying in person, find out whether you need to make an appointment. Then, when you go, take the following items with you:

• Primary proof of identity, such as a passport, driver’s license, or ID issued by your state;
• Secondary proof of identity, such as a Social Security card or a credit card with your name on it;
• Proof of address if the address on your primary ID has changed;
• Your employer’s name, address, and phone number;
• Funding (either cash or checks) to make your initial deposit.

If you are applying online, you will need to fill in the applicable numbers from the proof of identity documents shown above along with your employer’s information. Your acceptance is generally contingent upon receiving your initial deposit, and some institutions may ask you to fax copies of your ID to them. If the bank has a branch in your area, you may be asked to go in to prove your identity and sign your signature card in person.

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Should we be flattered… or concerned that they don’t get it? We were reviewing some of the presentations from the 2009 Payments Conference held by the Kansas City Federal Reserve, and saw a slide that mentioned StopChex.com.
We were mentioned in a presentation called “Implications of the Changing Payments Landscape for Integrity of Retail Payment Systems” (that’s a mouthful!).

The gist of the presentation was that “fraudsters” (like people who want to get off ChexSystems) can find a way around every fraud prevention system.

What we want to know, is how we are helping “fraudsters”? Here’s the deal: We give people who are on the ChexSystems list information about how to deal with their problem. Most people on ChexSystems end up there either because (1) they made an innocent mistake (like bounced a few checks, or didn’t close an account properly), or (2) there’s been a mistake made by ChexSystems or some other reporting entity.

People in these situations deserve help. We don’t provide any information about how to “circumvent” or “get around” ChexSystems. Instead, we give some advice about legal rights provided by the Fair Credit Reporting Act and advice about how to find a decent second chance bank.

Come to think of it, we aren’t flattered at all that we were mentioned in the presentation.

We think the bankers just don’t get it.

We certainly don’t condone any fraud, and aren’t suggesting that people trick or fool or mislead ChexSystems in any way. But if someone ends up on ChexSystems list improperly, through error, or with inaccurate information, they deserve the right to fight ChexSystems about it. Isn’t that what the Fair Credit Reporting Act is all about?

Also, don’t people deserve to learn about banking options such as bona-fide second chance checking accounts, or good prepaid debit accounts?

We think they do, and we’ll keep spreading the word.

In the meantime, check out the slides from the Payments Conference (see pages 19 and 20).

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Yesterday, the Board of Governors of the Federal Reserve announced a set of rules designed to prevent financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.

The rules are designed to stop the practice where banks charge high overdraft fees for transactions which could have been prevented by issuing a “decline” message during the course of a point of sale or ATM transaction when a debit card is used.

Under the new rules, consumers must be given the chance to “opt in” to an overdraft program.  Before opting in, the consumer must be given a notice that explains the financial institution’s overdraft services, including the fees associated with the service, and the consumer’s choices. The final rules, along with a model opt-in notice, are issued under Regulation E, which implements the Electronic Fund Transfer Act.

Will this increase the number of people on the ChexSystems List?

We think the new rules are great (anything that reduces fees is generally a good thing). However, what happens to people who choose not to use overdraft protection, and overdraw their accounts by mistake? There are some situations where debit card transactions can’t be prevented (for example, in an “off line” debit card transaction, such as at McDonalds or other quick serve restaurants). If the transaction goes through and overdraws your bank account, you’ll get hit with an insufficient funds fee.

Get too many of these, and your bank will report you to ChexSystems.

Get enough bad marks on ChexSystems, and you’ll have your bank account closed down, and you’ll have a heck of a time opening a new bank account.

It’s a vicious cycle.

Of course, the best thing to do to prevent all of this is to make sure you know exactly how much money is in your bank account at all times, and never overdraw your account. But this is (maybe) asking too much of people. As the New York Times once put it — “Balancing a Checkbook is Not Calculus — It’s Harder” (see the original article, here).

Stay tuned, and let’s see how the new Overdraft Rules work out for the consumers.

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Apparently, the great State of Missouri is the defendant in a lawsuit involving our favorite (that’s sarcastic) credit reporting agency — ChexSystems.  Yep, Missouri faces damages of to $250 Million (or more) if a recent class action suit is successful.

Here’s what happened. Back in 2008, a group of class action plaintiffs claimed that several agencies illegally obtained a database from the Missouri Department of Motor Vehicles.  The plaintiffs claim the database had confidential information about Missouri drivers.

A Federal Law (the Federal Driver’s Privacy Protection Act) makes it illegal to sell driver’s license information.  The plaintiffs claim the State of Missouri sold the data illegally (to ChexSystems) and that ChexSystems acted improperly in getting the data.

Here’s a quote from the Courthouse News Service article about this matter:

Mitchell Burgess, the plaintiffs’ attorney, said the damages could be staggering. He said federal law provides for damages of up to $2,500 a person. If 100,000 people are affected, then damages could hit $250 million.
The suit states that the class could number in the millions.
Burgess said Missouri cannot be sued under the statute, but that people who work for the state could. He said 10 DMV workers were named as defendants in the Source for Public Data suit, including Omar Davis, director of the Missouri Department of Revenue. No DMV workers were named as defendants in the Chexsystems suit.
“It seemed unnecessary to bring them into this case,” Burgess said. “It seemed like a waste of resources to all parties to bring in the 10 defendants from the other case. … It’s all going to be addressed. It seemed like trying to squeeze blood from a turnip at that point.”
The workers’ inclusion means the State of Missouri could be liable for some or all of the damages.

It’s amazing how aggressive credit reporting agencies and other data providers are in trying to get more data about us. Maybe they should spend a little more time and effort to make sure that the data they do have is accurate and up to date.

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Since there isn’t much public information about ChexSystems and the number of people on the ChexSystems list, we need to look to other sources to identify trends associated with ChexSystems.  Find out why we think the number of people on ChexSystems is rising…

The Federal Reserve often conducts analyses of consumer finance related topics to identify banking and finance trends.  In early 2009, the Federal Reserve published the results of a “Survey of Consumer Finances” from 2004-2007.  The Survey focused on a number of different aspects of consumer financial behavior, and one of the areas was whether consumers use checking accounts (and, if not, why they don’t use them).

Here’s a brief summary of the main finding by the Fed:

In 2007, 92.1 percent of families had some type of transaction account—a category comprising checking, savings, and money market deposit accounts; money market mutual funds; and call or cash accounts at brokerages. The increase of 0.8 percentage point in ownership since 2004 resumed the upward trend seen in earlier surveys after the ownership rate had remained essentially unchanged over the previous three-year period.

Sounds good, right? More people have checking accounts.

But wait, when we drill deeper into the data, we see that the results were broken into different categories. People who didn’t have checking accounts were grouped into categories based on WHY they didn’t have a checking account.

The biggest gainer? The group of people who don’t have a checking account because of “Credit Problems” (which more than doubled in size between 2004 and 2007.

Te main “credit problem” which prevents someone from getting a checking account is the ChexSystems list. So, based on the Fed study, it appears that the number of people with ChexSystems problems may have doubled between 2004 and 2007.

We are trying to get more details from the study so we can dig further. If you want to read the whole report, you can check it out here.

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There’s a great article over at the Consumerist blog that reveals how Bank of America uses ChexSystems.  The article follows the story of a young person who has had problems opening an account at Bank of America.

Here’s the story.  A young guy named Jesse tried to open a checking account with Bank of America.  The Bank turned him down, and effectively said he could never have an account with them.  But they gave no reason.

(those of us who deal with ChexSystems problems all the time aren’t too shocked by this — we know that Bank of America uses ChexSystems)

The Consumerist then spoke with an anonymous VP at Bank of America.  Here’s what the Bank of America VP told them:

We have had to close out accounts in the past due to a negative report from ChexSystems which shows that the customer had a charged off account with money owed. To keep using ChexSystems we have to not open accounts that have money owed to other banks. That is usually the only way [for those banks] to collect.

Of course, BoA could have explained everything a lot better. Just because someone has a negative ChexSystems report, it doesn’t mean they are blackballed forever. It’s kind of like bankruptcy, as you come off their records after 7 years.

So far, Jesse has not been able to identify exactly why Bank  of America denied his account.  He claims he has never bounced a check in the past, and does not believe he owes any prior bank any money.
Here’s our advice to Jesse — Go to the ChexSystems website.  Order your ChexSystems report.  Send it to us, and we’ll review it for you and will help you figure out what the problem is.   Remember — 80-90% of all ChexSystems reports have some error in them.  Your account denial may be the result of an error in the ChexSystems report.  You need to order your report to figure out what the issue is.

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A study just released by the FDIC claims that “one-quarter of banks offer ’second chance’ accounts designed for individuals not qualified for conventional bank accounts.” What? Where are these “one-quarter” of banks at? Have you tried to find a good second chance bank account lately?

Here’s a quote from the FDIC study:

A blemished credit history presents further challenges to opening a new account. Most banks (87 percent) require a third-party credit check screen, such as ChexSystems, when a customer opens a new checking account. One-quarter of banks automatically reject a new account application that receives a negative result on the credit check screen, and only half (49 percent) can override a negative result at a branch location. However, one-quarter of banks offer “second chance” accounts designed for individuals not qualified for conventional bank accounts.

Survey results reveal that a blemished credit history and insufficient identification impede unbanked and underbanked individuals from opening bank accounts more than any other factor. When asked to rank order the three most common reasons that a new account applicant is declined, banks identified “negative account screening” first, followed by “insufficient identification information” and a “low credit score.”

The study references the following footnotes and information:

…ChexSystems, Inc., is a network of financial institutions that provides deposit account verification services to members and information to help them identify account applicants who may have a history of account mishandling (for example, people whose accounts were overdrawn and then closed by their bank).

…”Second chance” accounts are frequently checkless accounts or accounts with limited check-writing privileges that may be connected to a debit card. They usually provide most or all of the benefits of a regular checking account, including a bank routing number and account number.

We aren’t sure where they got the information about the second chance bank accounts… but we are pretty sure that the 87% statistic regarding ChexSystems is accurate (or maybe even low!).

You can check out the whole FDIC report here.

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If you are a loyal reader of this site, you know we recommend that EVERYONE get a copy of their ChexSystems report. You need to know what is on your ChexSystems record, and the only way to find out is to order a copy of your official ChexSystems report. (We provide information on how to contact ChexSystems here).

But what do you do when you get your report? How do you figure out how bad your ChexSystems report is? Well here’s a simple way to look at things. There are two general types of items on your ChexSystems report — items about your mistakes (like bouncing checks), and items that indicate that you may have committed fraud.

If you have simple mistakes on your report, you stand a decent chance of opening a new bank account.

If you have fraud items on your ChexSystems report… well, you may have a difficult time opening a good bank account for a while (although you may be able to open a second chance checking account).

Here are things to look for on your ChexSystems report that are associated with suspected fraud:

• Writing checks on a closed account.
• Possible false information used in opening an account.
• Transactions involving returned items from own account at another bank.
• Excessive drawing on uncollected funds.
• Automatic teller machine abuse.
• Transactions involving possibly forged items or checks.
• Suspected fraud activity of electronic transfer account (ETA).
• Transactions involving items belonging to a deceased party.
• Transactions involving items belonging to another party.
• Using funds credited to an account in error or received in error.
• Transactions involving items with irregular signature/endorsement.
• Transactions involving checks returned stop payment.
• Possible forgery.
• Transactions involving possibly altered items or checks.
• Transactions involving possibly stolen items or checks.
• Suspected fraud activity.

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We get asked this question all the time: “Who is ChexSystems, Inc.”?

Here’s the answer (at least as of the Spring of 2009 … as the ownership changes from time to time!).

At least as of the date of this blog post, ChexSystems, Inc. is a subsidiary of Fidelity National Information Services, Inc. Fidelity National Information Services, Inc. is a publicly traded company (you can find them on the NY Stock Exchange under the symbol “FIS“). They describe themselves as:

a leading provider of core financial institution processing, card issuer and transaction processing services and outsourcing services to financial institutions and retailers worldwide. FIS has processing and technology relationships with 40 of the top 50 global banks, including nine of the top 10. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 13,000 financial Institutions in more than 80 countries.

ChexSystems, Inc. was acquired by FIS when FIS acquired eFunds, Inc. in 2007. Now, FIS has a complete line of financial services products, including products related to account opening and decisioning (such as the bad customer database maintained by ChexSystems, Inc.).

It’s interesting to note that there is almost no discussion about ChexSystems, Inc. on the FIS website. Presumably, FIS is trying to avoid customer contact and complaints?

One of the few places where the connection between FIS and ChexSystems, Inc. can be found is in SEC filings made by FIS. Here’s a quote from FIS’ most recent annual report:

The Acxiom action was filed against the Company’s ChexSystems, Inc. subsidiary, while the Biometric suit was filed against the Company’s Certegy Check Services, Inc. subsidiary. The judge recused himself in the action against Certegy because he was a potential member of the class. The lawsuit was then assigned to a new judge and Certegy filed a motion to dismiss. The court granted Certegy’s motion to dismiss with prejudice in the third quarter of 2008. ChexSystems filed a motion to dismiss or stay its action based upon the earlier settlement and the Court granted the motion to stay pending resolution of the Florida case. The court dismissed the ChexSystems’ lawsuit with prejudice against the remaining defendants in the third quarter of 2008.

(That is, the SEC filing discusses a litigation matter involving FIS’ subsidiary, ChexSystems, Inc.).

Anyone have any more detailed information about ChexSystems, Inc. and their corporate structure?

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Are you sick and tired of searching for a non ChexSystems bank? We provide lots of information on this site, and have listed quite a few non ChexSystems banks. But the lists keep changing, and it is always hard to find local banks that don’t use ChexSystems.

We may have found the answer to your needs!

We recently were told about a new search tool that lets you search for non ChexSystems banks. You can even search for local non ChexSystems banks. We told a few StopChex readers about the tool, and they LOVED it. Here’s a quote from one reader (Paula P.):

I went to the link you provided and then found [bank name] website via the link and applied for a checking account (no fees) online. I received an approval e-mail today and they are sending my account package in the mail today. Thanks for your help!

Here’s the deal. Because the site is brand new, and can’t handle a huge number of people, the owner of the site asked us to only give out the link to a limited number of people.

We want to tell as many people that we can, but we need to respect the wishes of the site owner. So, we’ve decided to send a link to the new site only to people who specifically ask for it.

Do you want to be able to easily search for non ChexSystems banks near you? Act now, and click on the banner below so that you can be one of the few people we provide the link to.

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Here’s a tip submitted by one of our readers (thanks Daryl!). Learn how she opened a great bank account, even though she is on ChexSystems.

Here’s Daryl’s tip:

From personally experience because the economy is so bad alot of banks are being more lienant. Wells Fargo bank now has something called a second opportunity checking which is very nice, it gives you a gold check card and all of the other banking ammentities. Every check I deposit seems to be placed on hold since I opened the account. You have to apply for a regular checking and once declined they send you a letter in the mail telling you that you may qualify for the opportunity checking. You can fund your deposit right over the phone and the account is opened within two business days. For people in Orlando like myself McCoy Federal Credit Union also offers a second opportunity checking.

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This is the final article in our series of managing your checkbook and checking account. In this article, we provide a number of tips for balancing your checkbook with a high level of success. Pay attention, ‘cuz a balanced checkbook = no bounced checks = NO CHEXSYSTEMS!

Balancing your checkbook is very important. If you make even the smallest mistake it could go a long way in throwing your entire checkbook out of whack. Even though it may sound difficult, if you are patient and diligent about tracking your expenses and deposits you should be able to avoid all mistakes.

The first step in balancing your checkbook is to know where you are starting. How much money do you have in your account right now? This is your jumping off point.

Once you know where you are starting you should make it habit to record every purchase, deposit, and fee. As noted above, missing even one detail will cause your checkbook to be out of balance. In turn, you will be faced with a situation in which you have to chase down the problem; this is not always as easy as it sounds.

There are two things that can throw your checkbook out of balance month in and month out. First off, don’t forget about recurring fees. For instance, does your bank charge you for sending out a paper statement? If so, you need to remember to add this in every month.

Secondly, don’t forget about direct deposits and direct debits. Since you are not doing anything to trigger these transactions you may forget about them. Many people have their paycheck deposited directly into their checking account. At the same time direct debit is also becoming more and more common.

If you pay close attention at all times and record accurate information you should never have to deal with a checkbook that is not balanced. Once you know what to expect and how to treat each transaction you will be in position to keep a balanced checkbook at all times. And that is exactly what you want.

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Here’s a question from one of our readers:

I would like to know why does chexsystem keep you on their file for 5 years? To be honest I think 2 is enough and with the way of the economy right now you would think that the way these businesses are running they would do what ever it takes to keep the consumer a client.

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Here’s some of the most important information we can give you to keep you off ChexSystems — don’t write bad checks. Don’t do it on purpose. Don’t do it by accident.

It’s easy to say this, but sometimes it can be hard to avoid writing a bad check. In this article (the fourth in our series on checkwriting and checking account management), we discuss how to avoid writing bad checks and what to do if you make a mistake and need to rectify your situation.

Can you ever imagine a situation when it is a good thing to write a bad check? Probably not, and you would be right. If you are responsible enough to have a checking account you need to be responsible enough to avoid writing bad checks. But guess what? Many people cannot escape this trap and constantly find themselves writing bad checks.

The following tips should help you avoid this situation:

1. Before you write a check or head to the ATM for a withdrawal make sure you have enough money in your account. You can keep track easily enough if you accurately use your check register. Don’t forget to include all transactions in addition to checks such as ATM withdrawals and debit card purchases.

2. Beware of bank fees. This is one area that gets people in trouble all the time. If you are tight on money one fee, no matter how small, could push you into writing a bad check. Make sure you are always on the lookout for bank fees, and that you record them if they appear.

3. Check your register regularly to ensure its accuracy. You can cross reference your information by calling your bank or looking over your statement. If your register is not accurate it is only a matter of time until you write a bad check.

4. Have you ever looked into the benefits of overdraft protection? This will cost extra but in the long run it can save you a lot of money if you happen to make a mistake.

If you write a bad check you are going to cause several headaches for yourself. Not only will the bank charge you a fee, but the individual or company you are paying will also need a new check. And if you don’t get it to them in time there is a chance that you will incur a late fee. Instead of dealing with all this use the tips above to avoid writing bad checks.

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This is the third article in a series of articles about checking account management. In this article, we provide tips on how to properly use and cash a check. To avoid ending up on the ChexSystems list, you need to use and cash checks properly.

Have you received a check? If so, you will probably want to take it to the bank to have it cashed. This is an easy process once you know what you are doing. It is also something that you should be excited about. After all, most people get used to writing checks and spending money. When you receive a check it means that you can either obtain cash or deposit the money direct into your checking account.

Here are a few tips to follow when it comes time to cash a check:

1. Do not sign a check until you are ready to cash it. It would be in your best interest to make this the last step of the check cashing process. This helps to protect your money and account.

2. When it comes time to sign your check you should only use the specified area on the back of the check. You should also remember that it is important to sign your check as it appears on the front.

3. It is important to include your bank account number beneath your signature on the back of the check. This is something that many people forget so make sure you get in the habit.

There are three ways you can use a check. They include: cashing it, depositing it, or signing it over to somebody else. When cashing a check include the words “Cash Only” above your signature; when depositing a check include “Deposit Only”; when signing over a check include “Pay to the Order of”.

The option you choose is up to you. It is safe to say that cashing and depositing are most common, but you may want to sign over a check to another at some point in time.

The above tips are sure to make it easier on you when it comes to using and cashing checks.

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This is the second in a series of articles about managing, using and maintaining a checking account (so you don’t end back up on the ChexSystems list). In this article, we discuss some of the most important details to keep in mind when writing a check.

There are many ways to pay for products and services and writing a check is one of the most common. Once you know how to write a check you will probably keep this information in mind for the rest of your life. But of course you need to make sure that you are always doing the right thing. After all, one mistake on a check could cost you a lot of time and money.

There are many details that need to be taken care of when writing a check. They are as follows:

1. Date. You need to place the proper date on your check. Many people will lie about the date if they don’t have the money to cover the check amount or want the other party to believe they sent the money earlier than they did. Instead of playing these games you should supply accurate information.

2. Enter the “pay to the order of” information. This is the company or individual you are paying.

3. Include the dollar amount in numbers. To go along with this you should also include the dollar amount in written words. As you know, these two numbers need to be the same.

4. Remember to sign your check. If you forget to sign your check the payee will not be able to cash it.

5. Use the memo line. This is optional in many cases, but something you should get used to. This is a place on your check that allows you to make notes to remind you of what the check was used for. Additionally, some companies will ask that you include your account number on this part of your check.

Finally, don’t forget to write in ink, not pencil. You don’t want anybody erasing the information you provided and adding their own.

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This is the first in a series of articles about checking accounts and checking account management. Good checking account management is critical to your success in staying off the ChexSystems list. This first article provides information on opening a checking account including what to consider such as age, institution, etc.

Opening a checking account is something that most Americans do at some point in their life. That being said, you need to consider all your options and corresponding details to ensure that you open the right account. After all, there is no room for error when it comes to your money.

Here are several details to keep in mind when it comes time to open a checking account:

1. Shop around. You will find out soon enough that there are many local banks willing to help you open the right checking account. It is important to find an institution with a good reputation for reliability and customer service. To go along with this, you want to make sure that you choose a checking account that has no fees attached to it.

2. Compare services. It is important to know the pros and cons of each bank and checking account before deciding on one. Do you know what bank A offers that bank B is lacking? And vice versa? It is very important to know which services are available.

3. Which bank offers extras upon opening a checking account? Some of the most common extras include gift programs, a large network of ATM’s, electronic banking options, and much more. This detail goes along with number two in which you will compare services.

You need to choose a bank and checking account because it is right for you and your money. Although you may have a lot of options to choose from, you need to research each one so that in the end your money and time is being put to good use. If you have had ChexSystems problems in the past, you may have fewer options — but you still need to research your options. We’ve done some of the work for you (and highly recommend several products including the amazing AccountNow Prepaid Visa Card, and the second chance checking account).

Overall, there is nothing difficult about opening a checking account. Once you know what is available you can follow the tips above to choose the bank and checking account that will make you feel best about your finances.

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This is a tip we recently received from a reader. (Thanks Jim!)

Please let your readers know that Washington Mutual will let you open a bank account if you are on chexsystems, but then they will CLOSE the account a week or two later after their “recovery” team reviews your record. So, DON’T open a WaMu account (unless you talk to an account rep about your chexsystems problems FIRST.

Do YOU have any tips you want to share with our readers? Let us know, and we’ll spread the word.

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There’s lots of talk about what a pain it is to end up on the ChexSystems list, but little talk about how to avoid the list in the first place. Here are 14 things to avoid to stay off the ChexSystems list.

1. If you owe your bank money – PAY IT.
2. Don’t bounce checks.
3. Don’t overdraw your account when using your ATM or debit card.
4. Don’t overdraw your account by authorizing an “ACH” debit when you won’t have money.
5. Don’t set up recurring ACH withdrawals (such as to payday lenders or other companies) when you are not absolutely sure that you won’t have more than enough each time the withdrawal time arrives.
6. Don’t “float” a check (never write a check if you don’t have sufficient funds on the day you write the check).
7. Don’t open a bank account using a made up name or alias.
8. Never give fraudulent or wrong information on a bank account application.
9. Don’t commit ANY kind of check fraud.
10. If you write a check that bounces, fix it immediately by contacting your bank and the person or company you made the check out to.
11. Never assume that a bank will close your account after you withdraw all the money—they won’t. Call them and ask them to actually close the account.
12. Always check your bank balance and balance your account. You always need to know how much money you have in your account.
13. If you move, make sure your bank knows your new address.
14. Always review your monthly statement, and watch out for any sign of identity theft or transactions you did not authorize.

These tips are usually pretty easy to follow. Follow these tips, and you should have no problem staying off ChexSystems.

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It is estimated that between 80-90% of all U.S. banks use information from ChexSystems to make decisions about whether to open new accounts for their customers. If you are on ChexSystems list, and have a record of bad banking behavior, you will have a very difficult time finding a good bank that will allow you to open an account with them.

Having a bank account is almost essential in today’s society. Most people take having a bank account for granted. Those of us who have ended up on ChexSystems’ list don’t take them for granted anymore—the expense and frustration of having to rely on Check Cashing stores and Money Orders can get old quickly! Here’s an example of how expensive it is if you don’t have a bank account — you can see that people without bank accounts spend almost four times as much each month, just for the privilege of paying bills and cashing their paycheck:

The graph shows that some banks can have fees that are up to 6 times less expensive than using a check casher. If you are on the ChexSystems list, you probably pay (on average!) at least $60 each month just to cash your paycheck and pay your bills (and the chart is based on someone cashing a $400 paycheck at a check casher each week – if you cash larger checks, you pay more… sometimes much more). I don’t know about you, but that adds up to more money than I can afford to waste.

Also, remember that if you end up on ChexSystems list, you stay there for 5-7 years. Do the math. That’s thousands of dollars wasted on check cashing and money order fees. Do yourself a favor and stay off the ChexSystems list. And if you are on the list, at least consider opening a prepaid debit card account (such as the fantastic AccountNow Prepaid Visa card account) — your wallet will thank you.

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The FDIC recently published the results of a huge survey they undertook to review the insufficient funds procedures of a bunch of large U.S. banks. The results are interesting …

We’ll discuss other findings from the survey in later posts. For today, we’ll focus on one part of the FDIC survey. The FDIC tried to find out whether banks that charged customers NSF fees whether they tried to warn customers that they were about to overdraw their accounts before an ATM or Point of Sale debit withdrawal occurred.

That is, the FDIC asked if banks (who had the ability to do so), warned or alerted a customer who was taking out too much money at an ATM or point of sale terminal.

You would think that a bank would warn you, right?

Wrong!

The FDIC found that the overwhelming majority of banks only told customers that they overdrew their accounts AFTER an ATM or Point of Sale transaction occurred.

According to the FDIC:

…less than one-quarter (23.5 percent) informed customers at the time of the transaction, prior to its completion. Instead, a slight majority (54.5 percent) informed the customer subsequent to the transaction, via notification such as mail or e-mail, rather than at the time of the transaction; slightly more than 16 percent notified customers about NSFs at the time of the transaction, but after its completion.
For study population institutions with automated overdraft programs that covered POS/debit transactions (403 banks), only 7.9 percent of such banks notified customers of an NSF at the time of a POS/ debit transaction prior to completing the transaction. Instead, the majority (86.2 percent) informed the customer about an NSF subsequent to the time of the transaction, such as via mail or e-mail.

No wonder banks rake in the dough on NSF fees. They encourage them. And we end up footing the bill, and ending up on the ChexSystems list.

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Are you sick of hearing banks tell you that you can’t open a bank account because you are on the “ChexSystems list”? Here’s one way you can take action and get off the ChexSystems list.

One of the most effective ways to solve your Chex Systems problems is to get off the Chex Systems list completely.  Remember, ChexSystems is not perfect—they make errors.  If they have made any errors in your ChexSystems report, you may be able to remove the errors and clean up your Chex Systems record.  This article explains how you do it.

First things first.  To find an error on your Chex Systems report, you need to get a copy of it.  To order a copy, call ChexSystems Inc at: 800-428-9623 and follow the automated instructions to order a copy of your Chex Systems consumer report.  It will take a few days to get it.  You may want to bookmark this page so you can return once you have your copy. 

Once you have your copy, spend some time reviewing it.  Your report will include the following sections: your name and “consumer identifier”, one or more items of “Reported Information” (this is the bad stuff Chex Systems is reporting about you!), one or more “Inquiries Initiated by Consumer Action” (these are things you have allegedly done that caused someone to pull your Chex Systems report), one or more “Inquiries Not Initiated By Consumer Action” (these are reports pulled by others about you without your direct permission), one or more “Retail Information” items (from other checkwriting databases such as SCAN), one ore more “History of Checks Ordered”, and then personal information about you, including your Social Security Number, and Drivers License.

Go over each of these items with a fine tooth comb!  Look for any errors or inaccuracies.  If you find any errors or inaccuracies, think about how you can prove that the items are wrong.  You should especially focus on the items in the section called “Reported Information”.  If there are reports of debts you owe to banks that you know you have paid, gather your proof (do you have a receipt for paying the debt?, etc.).  Collect all this information.

Now, lets go on the offensive and get that incorrect information removed from your report.  There is a law called the “Fair Credit Reporting Act” (or FCRA) in the U.S. that requires Chex Systems (and other consumer reporting agencies) to allow you to dispute all incomplete or inaccurate information in your consumer report.  You dispute the report by sending Chex Systems a letter detailing the errors.  The FCRA requires that Chex Systems reinvestigate the errors that you point out to them! This is very powerful.  In fact, the FCRA requires that Chex Systems look into the errors within 30 days (or 45 days if you send Chex Systems additional info during the 30 day period) from receipt of your letter.  Here’s the most powerful part of it—if Chex Systems can’t verify the information you are disputing, they must remove it from your record!

So, if you are stuck in Chex Systems limbo and can’t open a bank account, it is worth it for you to spend a few minutes to dispute any errors.  It doesn’t cost you anything, and if you succeed, you may end up with a completely clean record.

We recommend that you use a letter such as the one shown below.  Follow the instructions in the letter, and make sure to be clear about all errors.  Also, make sure to replace all of the comments in brackets and italics.  Be clear, helpful, and accurate.  Make sure to send the letter by fax or by certified mail (return receipt requested) and keep a copy for your records.  We’ve also put together a sample letter (see the second link below) to help clarify how you should write, and the type of information you may want to include.

Once you have mailed the letter, you may get contacted by Chex Systems for more information.  Make sure to remember when you sent the letter, and put a note on your calendar to follow up with Chex Systems if you don’t hear back from them in 30 days or so.  Check back at this website in a few weeks, and we will post some sample letters that you can use to follow up with Chex Systems. 

Remember, it only takes a few minutes for you to do this.  The benefits can be huge—imagine getting your name completely off the Chex Systems list!

Below is a sample letter for you to use and edit

Below is a sample letter for you to use and edit

Click on “MS Word” or “Txt” to download!

Here is a sample letter filled out as an example for you to follow.

Click on “MS Word” or “Txt” to download!

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Stuck on ChexSystems list? Did you know that you can remove certain negative information from ChexSystems so that you can get back to banking? Here’s a sample letter that you can use.

If you have received a copy of your ChexSystems Consumer Report, read it carefully and look for any errors. If there are any errors, send ChexSystems a letter (like the one below) demanding that they remove the errors. By cleaning up your report, you may be able to remove your name from the list and get any bank account you want.

Here’s the sample. If you have questions, add a comment below and we’ll try to help.

Sent Via Fax to 602-659-2197
Date: ———
Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100

Woodbury, MN 55125 RE: Request for Reinvestigation for John Doe Consumer ID: xxxxxx

Dear Sirs/Madam:

I recently received a copy of my ChexSystems Consumer Report from you. The date of the report I received is _______. I have carefully reviewed the report, and discovered one or more errors in the report.

This is a request that you investigate the following items that appear on my ChexSystems Consumer Report, and take appropriate steps to correct the errors:

[X] The following personal information about me is incorrect:

Erroneous Information Address is shown as: 55 Oak St, York, PA 02333 Phone is shown as: (434)234-2323

Correct Information My correct address is: 123 Main Ave., York, PA 02333 My correct phone is: (434)883-8372

[X ] The following “Reported Information” item(s) are inaccurate:

Source of Information: Jonestown Bank Erroneous Information: Account # 2342343 This information is inaccurate. I never have had a bank account with Jonestown Bank.

Source of Information: First Bank of PA Erroneous Information: Unpaid debt of $193 This information is inaccurate. Although I did have a balance due with First Bank of PA, I paid the debt on 1/1/2007. I am attaching a copy of my check dated 1/1/2007 for $193. Please mark the debt as paid in full or remove the item.

[X] The following inquiries are more than three years old and should be removed:

Inquirer’s Name First Bank of USO Second Bank Date of Inquiry 1/1/2004 10/1/2004

[X] The following inquiries were not authorized: Inquirer’s Name “Sample Bank”

Date of Inquiry: 5/1/2007

Explanation: I never applied for an account at “Sample Bank”

[X] The following information is over 5 years old, and should be removed from my report:

Source of Information: Second USA Bank

[X] Other incorrect information:

My ChexSystems Consumer Report indicates that I ordered checks on 7/1/2007. This is incorrect. I did not have a checking account at that time, and have not ordered any checks recently. The accuracy and completeness of the information contained in my ChexSystems Consumer Report is extremely important to me. Each of the items noted above is either inaccurate or incomplete, and I understand that you will carefully check each item specified above. I also understand that you will confirm the accuracy or completeness of the information above with the entity that reported the information to ChexSystems.

I expect that ChexSystems will remove any information that the reporting entity(s) cannot verify and will modify any information that is incorrect or incomplete. I further understand that under 15 U.S.C. Section 1681i(a), you must complete your reinvestigation within 30 days of receipt of this letter. Thank you for your prompt and diligent attention to this matter.

Sincerely, ________________________________________
/John Doe /
John Doe
123 Main Ave.,
York, PA 02333
(434)883-8372
SSN: 555-55-5555
DOB: 01/12/1958

Enclosures: -Copy of Check Dated 1/1/2007

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For the first time, the total amount of transactions conducted using debit cards (including prepaid debit cards) has passed the total amount of transactions made using credit cards. The popularity of debit cards is a result of a number of factors.

One big factor in the explosive popularity of debit cards is the fact that more and more people have credit or banking problems. People who can’t qualify for a good credit card, and people who want to save money by reducing their credit card expenses, love prepaid debit cards. Prepaid debit cards allow customers to shop on the Internet, rent cars, and do almost all the same things they could with a credit card (but without the expense of credit card interest rates!).

Prepaid debit cards are also perfect for people who have had banking difficulties in the past, and who can’t get a regular checking account. Many companies that issue prepaid debit card accounts (like AccountNow, the issuer of the hugely popular AccountNow Prepaid Visa and the AccountNow Prepaid MasterCard) do not use the ChexSystems systems, and allow customers with banking problems to open accounts without a hassle.

According to recent reports by the Nielson Company, debit card purchases are expected to climb 13% in 2008, to $1.2 trillion—compared with a 3% rise, to $1.9 trillion, for credit-card transactions. At Visa International, the World’s largest card company, debit spending could surpass credit this year.

This growth is great for people who use prepaid debit cards, as the banks will start to add even more innovative features to these products.

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If you are on ChexSystems, you need to understand the features of and differences between checking and savings accounts.  If you are on the ChexSystems list, you are probably shopping around for a new and better bank account.  This guide to checking and savings accounts can help you!

When it comes to finding a safe place to put your money, there are a lot of options. Savings accounts, checking accounts, certificate of deposits and money market accounts are popular choices. Each has different rules and benefits that fit different needs. When choosing the one that is right for you, consider:

Minimum deposit requirements. Some accounts can only be set up with a minimum dollar amount. If your account goes below the minimum, no interest is paid or you are charged extra fees.
Limits on withdrawals. Can you take money out whenever you want? Are there any penalties for doing so?

Interest. How much (if anything) is paid and when: daily, monthly, quarterly, yearly? To compare rates offered locally to those from financial institutions around the nation, visit bankrate.

Deposit insurance. Look for a sign that says your money is protected by the Federal Deposit Insurance Corporation. Credit union accounts have similar protection from the National Credit Union Administration.

Convenience. How easy is it to put money in and take it out? Are there tellers or ATM machines close to where you work and live? Or would you receive most of your service via the telephone or Internet? Can you make direct deposits and other electronic transfers?

If you are considering a checking account or another type of account with check-writing privileges, add these items to your list of things to think about:

Number of checks. Are there a maximum number of checks you can write per month? If you write more, what is the charge?

Amount of check. Is there a minimum or maximum amount for any one check?

Account and check fees. Is there a monthly fee for the account or a charge for each check you write? Some accounts only charge a fee if you write more than a certain number of checks per month.

Holds on checks. Is there a “hold” or waiting period before you can access the money you deposit in your account? There may be a longer hold period for out-of-state checks.

Overdrafts. If you write a check for more money than you have in your account, what happens? You may be able to link your checking account to a savings account to protect yourself. There could also be high fees for “bounced” checks (from you or written to you). Bounced checks can blemish your credit record so it’s better to be covered.

Checks 21. The new Check Clearing for the 21st Century Act (often referred to as Check 21) allows banks to clear checks electronically instead of exchanging actual paper checks. Banks no longer have to return original checks with your monthly statements or even when there is a problem with a particular check. Check 21 creates “substitute checks” which you can use as legal representations of the originals. Ordinary check images, which some banks have provided for years, are NOT substitute checks. It has always been a good idea to get canceled checks with your monthly statement. Now you will want “substitute checks” each month.Banks usually take at least a day or two to process paper checks, but electronic processing can happen almost immediately. This means you have less “float” time between when you write a check and when the money is actually taken out of your account. This could increase the chance that one of your checks will bounce due to insufficient funds. Having your employer deposit your paycheck directly into your account can help you cope with the change in “float” time. Quicker clearing also means less time to stop payment on a check.

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New second chance bank accounts pop up from time to time. We like to review as many of them as possible so that our readers have lots of choices and can make informed decisions. We just heard about this new product from Vision Premier.

The Vision Premier account is a prepaid debit account issued by The Bancorp Bank (a bank that is owned by a publicly traded company called The Bancorp., Inc.). The bank is FDIC insured, and processed over $2.6 Billion in transactions last year (so they are pretty big, and probably pretty stable in today’s economy). According to Bankrate, The Bancorp Bank is “safe and sound” (they give the bank a 3 star rating, which indicates that the bank is very stable).

Here are some of the features of the Vision Premier second chance bank account:

• $0 WEEKLY FEE – with Direct Deposit!
• $0 ACTIVATION FEE – with Direct Deposit*
• Guaranteed approval† with no credit check
• FREE unlimited purchase transactions
• FREE Direct Deposit – no more check cashing fees
• FREE Account Alerts – email and/or SMS text messages
• Pay any bill: rent, cellular phone, insurance, utilities, etc.
• Load cash at over 100,000 participating retail locations
• Take Control – no late fees, no interest, no NSF fees

The Vision Premier bank account looks like a great choice for folks who have ChexSystems problems. Check it out today. If you have any experience (good or bad) with this account, please let us know so we can spread the word.

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Everyone who has ever ended up on the ChexSystems list has tried to find a local bank that does not use ChexSystems. Most people can’t find one. Here are a few tips for finding local second chance checking accounts.
First, before you go any further in your search for a local second chance checking account, make sure you consider whether a prepaid debit card (such as the excellent AccountNow Prepaid Visa Card) may be a better choice. Debit card accounts often provide more features than a regular checking account, and may even be less expensive.

If you would prefer to have a local bank account, here are a few tips. It can be very difficult to find a bank that does not use ChexSystems, but there are some banks that will still let you open an account.

• Find out if you qualify for membership in a Credit Union. Many Credit Unions do not use ChexSystems. Other Credit Unions do use ChexSystems, but are more liberal in their new account opening rules. If you do qualify for membership in a Credit Union, check them out.
• Pick up your phone book, and see if there are any local savings banks that are near you (not national banks — just check for local banks, like a community savings bank). Pick up the phone and give them a call — don’t give them your full name, just ask what their requirements are for opening a new checking account. Ask them whether they use ChexSystems in their new account opening process. If they don’t, then stop in and fill out an application.
• A few of our readers have successfully opened accounts at Bank of America using their online bank account application form (these are people who were denied accounts when they went into their local BofA branch). Others have had success with the excellent Bank of Internet (they offer a full fledged checking account with awesome rates!). Try filling out an application over the Internet, and see what happens. At the very worst, you’ll get denied. At the best, you’ll get a new second chance checking account.

Good luck on your quest to get back to banking!

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The Fair Credit Reporting Act promotes the accuracy and privacy of information in consumer credit reports. It also controls the use of credit reports and requires consumer reporting agencies to maintain correct and complete files. According to this act, you have a right to review your credit report and to have incorrect information corrected. Know this—The Fair Credit Reporting Act applies to ChexSystems, and can help you correct your ChexSystems Consumer Report.

Below is a summary of your rights under the Fair Credit Reporting Act. If you are having ChexSystems problems, you should know that you have these rights. If you are interested in learning more, and learning how to use the Fair Credit Reporting Act to GET OFF ChexSystems, consider getting the Guide to Get Off ChexSystems.

Issuing Credit Reports

Credit bureaus, the most common type of consumer reporting agency (CRA) that compiles and issues credit reports, are required to help you understand your report. ChexSystems is a CRA. Reports can be issued only to those with a legitimate business reason. These include creditors, employers, insurers, and government agencies reviewing your status for licensing or benefit purposes, or any third party for whom you request a report.

ChexSystems Consumer Report Errors

If you find an error on your ChexSystems consumer report, you should notify ChexSystems in writing immediately. ChexSystems is responsible for investigating and for changing or removing any incorrect data. The source of the error must then notify all consumer reporting agencies where they sent information. If you are not satisfied with the correction, you have the right to add a brief statement (100 words or less) about the issue to your ChexSysetms report. The statement should be a clarification, not an explanation, of credit problems.

Denied Credit (or bank accounts)

If your bank account application is turned down because of an error on your ChexSystems report, the bank is required to provide you with the name and address of the credit bureau that issued the report. If you were denied a checking account, then ChexSystems will likely be listed as the bureau that issued the report. Then, you have 30 days to request a free copy from ChexSystems (although ChexSystems gives you a total of 60 days). ChexSystems must disclose to you all information in the report, its source, and who has recently received the report.

You have the right to have ChexSystems re-issue corrected reports to bankswho received reports within the last six months, or to employers who received one in the past two years.

Disclosure

Consumer reporting agencies like ChexSystems must provide you access to the information in your credit report, as well as identify those who have requested the information recently. There is usually a charge for each report, unless you have been denied credit or a bank account recently.

You are entitled to one free report a year if you certify in writing that: (1) you are unemployed and plan to look for a job within 60 days, (2) you are on welfare, or (3) your report is inaccurate due to fraud.

Limiting Access

In some situations, you may request that consumer reporting agencies do not distribute your name on lists used by creditors and insurers to make unsolicited offers of credit and insurance. Requests can be made by telephone or in writing by filling out a form available from each credit reporting agency. For telephone requests, call (888) 5 OPT OUT to be excluded from Experian, Equifax, and Trans Union. Telephone requests last for two years; written requests are permanent. You may not be able to limit the distribution of your ChexSystems report.

Consumers have the right to sue consumer reporting agencies (such as ChexSystems), users, and providers in state and federal court for violations of the Fair Credit Reporting Act.

Have you recently been denied a bank account? Were you surprised to find out that you are on the ChexSystems list? Well, welcome to the crowd — lots of people are on that list! Here are a few things you should know about your Federal rights. You have some options under a law called the Fair Credit Reporting Act.

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Whether you are selecting a traditional bank or an online bank that has no physical offices, it’s wise to make sure that it is legitimate and that your deposits are federally insured. Here are tips specifically designed for consumers considering banking over the Internet.

Read key information about the bank posted on its Web site.

Most bank Web sites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.

Protect yourself from fraudulent Web sites.

For example, watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.

Verify the bank’s insurance status.

To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site.

Also, you should check the FDIC’s online database of FDIC-insured institutions. You can search for an institution by going to Bank Find (formerly “Is My Bank Insured?”). Search by name, city, state or zip code of the bank, and click the “Find” button. A positive match will display the official name of the bank, the date it became insured, its insurance certificate number, the main office location for the bank (and branches), its primary government regulator, and other links to detailed information about the bank. If your bank does not appear on this list, contact the FDIC.

Some bank Web sites provide links directly to the FDIC’s Web site to assist you in identifying or verifying the FDIC insurance protection of their deposits.

Also remember that not all banks operating on the Internet are insured by the FDIC. Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank chartered overseas, it is important for you to know that the FDIC may not insure your deposits. Check with your bank or the FDIC if you are not certain.

For insurance purposes, be aware that a bank may use different names for its online and traditional services; this does not mean you are dealing with separate banks.

This means, for example, that to determine your maximum FDIC insurance coverage, your deposits at the parent bank will be added together with those at the separately named bank Web site and will be insured for up to the maximum amount covered for one bank. Talk to your banker if you have questions.

Know where to get more information about FDIC insurance.

Don’t worry about your deposit insurance coverage if you or your family have less than $100,000 in all your accounts combined at the same FDIC-insured bank. But if your accounts total $100,000 or more, find out if they’re within the insurance limit. Contact your bank for more information.

For additional assistance from the FDIC about the legitimacy of an institution or the insurance of your deposits, call the FDIC’s Division of Compliance and Consumer Affairs toll-free at 1-877-275-3342 or send an e-mail via the FDIC’s online Customer Assistance page.

The FDIC’s Web site also has an interactive service called EDIE (Electronic Deposit Insurance Estimator) that can help you determine the amount of your insurance coverage. Or, you can read the online deposit insurance brochure “Your Insured Deposits.”

It’s important to note that only deposits offered by FDIC-insured institutions are protected by the FDIC. Nondeposit investment and insurance products, such as mutual funds, stocks, annuities and life insurance policies that may be sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.  Not all banks that claim to be non ChexSystems banks are legitimate.  Do your homework!

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Ask the average American who or what ”ChexSystems” is, and you’ll get a blank stare. The unlucky people who do know about ChexSystems are usually painfully aware of how severely it can affect their lives. If you are on ChexSystems’ list, you have probably experienced the pain and frustration of not being able to open a new bank account, write checks, or use an ATM card (the core banking conveniences that everyone seems to take for granted). Unfortunately, millions of Americans are on (or have been on) the list, and are unable to enjoy these banking conveniences.

If you are on the list, it is important for you to know what ChexSystems is (and what they are not). ChexSystems is not a bank or a financial institution. Instead, they are a large consumer reporting agency (CRA) that maintains a nationwide database of banking customers who have been reported for writing bad checks, defrauding banks, having unpaid bank debts, or having too many “non-sufficient funds” (NSF) items. ChexSystems is owned by a large publicly traded company, eFunds, Inc. ChexSystems tries to (and has succeeded!) keep a low public profile. They don’t have a company Web site, and it is relatively difficult to find information about them.

Like the other large CRA’s (such as Experian and TransUnion), ChexSystems tries to distance itself from the problems it causes, claiming that it is simply a provider of information, and that it is the banks who use ChexSystems’ data who are the bad guys for turning customers down for new bank accounts. ChexSystems’ marketing materials claim that the company has no responsibility for the decisions banks make, stating that “ChexSystems neither approves nor declines accounts for banks and credit unions. The decision is entirely up to them.”

This is a convenient position to take. However, the fact is that ChexSystems (like the other CRAs) is not perfect. They make mistakes and errors can find their way into consumer’s records. The problem is that an error in a ChexSystem record has a severe and dramatic impact on a consumer. Even a simple error in a consumer’s banking history can prevent that customer from opening a new bank account (or could even result in the customer having their current banking relationship terminated!). That is a LOT of power for a CRA to have.

Other consumer’s find out that their banking record has been ruined as a result of identity theft. For example, a common scheme for some identity thieves is to open a bank account under someone else’s name, using a stolen social security number, and then take out a payday loan or two using the assumed identity. The funds are then withdrawn from the account, and the account is abandoned, eventually resulting in an account closure or NSFs. Unfortunately, the person whose identity was stolen now ends up on ChexSystem’s list. Unless you take steps to clear this situation up, you will be stuck on ChexSystems’ list (even worse, you’ll be stuck there for five years or more!).

As a consumer, if you have been informed that you have a bad mark in your ChexSystems’ file, you need to act quickly to try to resolve it. Unfortunately, ChexSystems doesn’t make it easy for you to clear up a bad mark (even if it is clearly in error). For tried and true tips and techniques, sign up for our free StopChex Newsletter. Don’t let ChexSystems bully you around!

Lots of people have never heard of ChexSystems until they have some banking problems. Then, you may be told the bad news that your bank account is being closed because you are on a list maintained by a company called “ChexSystems”. Then you need to find out: What is ChexSystems?

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If you have successfully applied for and opened a new non ChexSystems bank account, good for you! Or, even better, maybe you have successfully gotten OFF ChexSystems and have a new non ChexSystems bank account. In either case, you need to know how to protect your privacy while banking online and while using your new account online.

Some consumers may want to know how their personal information is used by their bank and whether it is shared with affiliates of the bank or other parties.

Starting July 2001, banks are required to give you a copy of their privacy policy once you become their customer, regardless of whether you are conducting business online or offline. You may also see a copy of it posted at the bank’s Web site. By reviewing this policy you can learn what information the bank keeps about you, and what information, if any, it shares with other companies.

Banks may want to share information about you to help market products specific to your needs and interests. If you do not wish to participate in information sharing, however, you have the right to prevent your bank from sharing your private personal information with parties not affiliated with the bank, except in certain limited circumstances. As of July 2001, your bank should provide a clear method for you to “opt out” of this type of information sharing.

You may have heard that some companies track your Web browsing habits while at their site, to understand your interests and then to market particular services or promotions. You may want to ask whether your bank tracks your browsing habits if these practices concern you. Also, your Web browser may enable you to block the ability of outside companies to track your browsing habits.

Your bank and your internet service provider may have more information about how to protect your privacy online.

Make sure to protect your privacy, and make sure to use your account wisely so you can stay out of trouble with ChexSystems!

Have you been able to open a new bank account? Maybe you opened a second chance bank account. Or maybe you were able to open a non-ChexSystems bank account. (good for you!). Now you should think about protecting your privacy.

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Up until recently, ChexSystems (through it’s parent company EFunds, Inc.) allowed people with poor ChexSystems records to “clean up” their records by taking a banking class through GetChecking.com. ChexSystems has recently announced that they are ending this program.

The termination of this program makes it even more difficult for people with negative items on their ChexSystems consumer reports to get decent bank accounts. (Like it wasn’t difficult enough already!).

Here’s a quote from the announcement made by EFunds about cancelling the program:

After careful consideration and discussions with industry partners, we have decided to end our affiliation with the Get Checking program effective December 31, 2008, at which point we will cease noting consumer files with information on the completion of the Get Checking program.
Get Checking was launched in an effort to provide consumers access to financial services despite past difficulty in managing personal finances. While we remain committed to helping consumers find access to needed financial services, recent studies of consumer activity following completion of the Get Checking program point to significant deterioration in performance objectives of successfully managing a checking account after program completion. This, coupled with the proliferation of our scored account decisioning products which are better able than legacy products at helping institutions open more accounts and manage the associated risk at an account level led to our decision to no longer participate in the Get Checking program.
We will continue to support the existing network of Get Checking educators and accept course completion information for consumers through the end of 2008. The QualiFile and New AccountChex products, which are able to utilize the Get Checking course completion data, will continue to do so through the one-year expiration period of the data.

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Did you know that you can have fradulent information removed from your ChexSystems report? You can. And with the increases in identity theft and mistakes in ChexSystems reports, you may need to. Here’s more information.Identity theft is occurring more and more frequently. It can cause major problems for you if you are a victim of it. One way it can affect you is by ruining your ChexSystems report. Here’s an example. What if someone got hold of your personal information, including your name, address, and possibly your social security number, and then opened (or tried to open) a bank account using your name? And then, what if that person bounced several checks on that account? Here’s what would happen—you would wind up on the ChexSystems list. Even worse, you could have your current bank account closed on you. Sound too scary to be true? Well, unfortunately, it’s true. It could happen to you. Here’s what to do if it does happen to you.

First, you need to order a copy of your ChexSystems report to find out exactly what is fraudulent in it. Once you’ve identified the potentially fraudulent items, you need to immediately:

1. File a police report, reporting the identity theft.
2. Make copies of your police report and identification information (see below).
3. Write a letter and send it to ChexSystems, explaining the situation, and asking them to remove the fraudulent information from your Chex Systems report.

Here’s an example of what to send (please be sure to include the attachments listed at the bottom of the letter):

Date:

(ChexSystems Address)

Dear ChexSystems:
My name is: ____________________________________
I have been a victim of an imposter attempting to open bank accounts or otherwise cause fraudulent inquiries to be made to my ChexSystems report. I require you to remove these inquiries from my ChexSystems report as outlined in the Fair and Accurate Credit Transactions Act, Sec. 152. I am enclosing a copy of my police report to support my statement.
My former name was (if applies): ______________________________
My current address is: ______________________________________
My address has changed in the past 5 yrs. My former address was:
__________________________________________________________
__________________________________________________________
__________________________________________________________
My Social Security Number is: ____________________
My date of birth is: __________________________
A phone number I can be reached at is _________________________
The following are the inquiries that I require you to remove from my ChexSystems report.
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
Attached is the required documentation. [documents vary according to state and agency]
* A copy of my Driver’s License / State ID [circle one]
* Proof of my address: a bill / a bank statement / a pay stub [circle one]
* A copy of my social security card
* A copy of my police report
Please send me a copy of my updated ChexSystems consumer report once the items have been removed.
Regards,

[Your Name...]

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One of the problems with ChexSystems is that they treat you as if you were guilty until proven innocent. That is, if you are on ChexSystems’ list, you stay there until you prove your innocence (or at least convince ChexSystems that they don’t have enough proof that you should be on the list). Luckily, there are ways you can get off the list.

Since ChexSystems is a credit reporting agency (CRA), they are regulated by the “Fair Credit Reporting Act” (FCRA). FCRA has lots of rules that allow consumers to dispute bad marks on their credit reports (such as the list maintained by ChexSystems).

Use of the rules provided in the FCRA is KEY to removing your name from ChexSystems list. The FCRA was enacted, in part, because credit reporting agencies aren’t perfect (far from it!). Some people estimate that as many as 80% of all credit reports have some errors in them! As you know, an error in your ChexSystems’ report can cause HUGE problems for you!

One of the key rules we rely on is the FCRA rule that gives you the right to challenge the validity of any information ChexSystems has in your file. As an example, if you have a closed bank account in your record, under FCRA, you have the legal right to challenge or dispute the accuracy of this information.

Even better, the FCRA rules state that any information contained in your report must be 100% accurate and verifiable or it must be deleted! This is powerful stuff! We know that mistakes happen, and that records and information gets lost (especially given the fact that ChexSystems processes millions of records each year!), so we can use this rule to our advantage.

In our free newsletter, we provide details of how you can use the rules in the FCRA to get off the ChexSystems list. Getting off the list is the best possible situation for you—you will then be able to open a new bank account at almost any bank (even your local bank).

Before you can figure out how to get off the ChexSystems list, you’ll first need to figure out how you got on the list in the first place. The FCRA requires that ChexSystems give you a copy of the report they have on you. You need to order a copy of the report! Our free newsletter tells you how.

Once you have a copy of your report, you may decide to send one or more letters to ChexSystems and/or your prior bank to dispute the information. We will provide you with sample letters and information on how to write these important letters, so that you maximize your chances of success.

Most of our customers mistakenly believe that they have NO CHANCE of getting off ChexSystems list. Don’t assume the worst! Our series of letters can still work for you! Remember, the best possible situation is for you to get OFF ChexSystems list, and get back to banking like you deserve!

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Having a bank account is almost essential in today’s society. Most people take having a bank account for granted. Those of us who have ended up on ChexSystems’ list don’t take them for granted anymore—the expense and frustration of having to rely on Check Cashing stores and Money Orders can get old quickly!

The simple fact is that bank accounts make life simpler and cheaper. What other reasons do you need? Millions of people don’t have bank accounts. Some don’t have a bank account because they don’t want one (for example, many illegal immigrants don’t get a bank account for fear of being reported to the immigration services, other people don’t get a bank account because they mistrust banks, etc.). Many others don’t have a bank account because they are on the list maintained by ChexSystems.

You can read more about what ChexSystems is, and how you get on their “bad” list. However, this article is about why you need a bank account, and how you can get one even if you are on ChexSystems’ list.

The benefits of having a bank account become clear when you imagine a day with a bank account, and one without.

Susan doesn’t have a bank account. She’s happy, because it’s payday, and she needs to cash her paycheck so she can buy groceries and pay some bills. To cash her check, Susan goes to the nearest Check Cashing store, waits in line, and pays a Check Cashing fee of $12. While she’s there, she buys several money orders so that she can pay her phone bill and her rent bill. Susan pays an extra $4 for each. Susan also has to buy stamps and mail both of the money orders. She finishes her errands by paying cash for groceries at the grocery store. By the end of the day, Susan has paid $20 (plus stamps) for her errands.

Susan’s co-worker Donna does have a bank account. She has the same errands to run. Her day goes like this: she checks her bank balance online, and confirms that her paycheck was directly deposited into her account. While she’s checking, she also uses the free online bill payment service offered by her bank to pay her rent bill and her phone bill. Donna then goes to the grocery store, and pays for her groceries using her debit card. She also uses her debit card to get $20 of spending money out of her account. Donna’s bank charges her an ATM fee of $1.50. So, by the end of Donna’s day, she has paid only $1.50, and has saved lots of time—she didn’t need to wait in line or go to a Check Casher to do her business.

Bank accounts open up a world of other opportunities as well. By having a bank account, you can:

• Save money and start building a nest egg (some checking accounts let you earn interest on your deposits);
• Start to build a better credit history so you can enjoy cheaper loans, credit cards, and insurance rates;
• Build a relationship with a bank so that you can get credit from the bank;
• Easily send money to relatives (even overseas!);
• Buy things by phone or over the Internet; and
• Get cash out of ATMs around the world.

Having a bank account is sometimes referred to as the first step in the “pathway to credit”. It’s important that you take that first step!

But I’m On the ChexSystems List. How Do I Open a Bank Account?

There is bad news and good news. The bad news is that experts estimate that 80-90% of all banks use ChexSystems to make their new account decisions. That means that you have a pretty slim chance of finding a bank that doesn’t use ChexSystems. The good news is that there are a few banks that don’t use ChexSystems. The difficulty is in finding one of those banks.

Luckily, resources are available (but be careful!). On the Internet, you can find a number of sources that claim to provide lists of banks that don’t use ChexSystems. Unfortunately, many of these lists are out of date. One list we saw had over 100 banks on it—but it was so out of date that only 3 of the banks actually did not use ChexSystems. Don’t pay for one of these lists.

We provide a free list of banks that don’t use ChexSystems. The list is current and up-to-date (only a few banks are on the list, but they all don’t use ChexSystems, and some guarantee 100% approval!).

Take your first step to get back on the path to credit. Save time and save money—open a bank account today!

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Welcome to StopChex, your best source of information and resources for learning about ChexSystems, finding non ChexSystems banks and second chance checking accounts, and getting off the ChexSystems list. Please browse our huge set of ChexSystems resources and non ChexSystems bank information, and join our newsletter to keep up to date on non ChexSystems banks and other information. With a second chance bank account, you can enjoy financial benefits others take for granted (like the ability to get direct deposit, online banking, low fees, cash advances, etc.) Second chance banking shouldn’t be difficult — we make it easy. Good luck on your quest to get back to banking!

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Remember, this site is not affiliated with ChexSystems — we are here to provide resources and information on how to deal with ChexSystems and other banking problems.  Here’s how to contact ChexSystems…

You have several options of how to contact ChexSystems. First, you can contact them by mail at the following address:

Mail: Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125

Next, you can contact them by phone at the following number:
ChexSystems Phone Number: 800-428-9623

You can also contact ChexSystems by fax:
ChexSystems Fax Number: 602-659-2197

Finally, you can visit their Website. We tell you how in our article about the ChexSystems Website.

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One of the complaints that many people have about dealing with ChexSystems is: How do I contact them? There are several ways to contact ChexSystems. One of them is to use their Website.

Unfortunately, the ChexSystems website does not allow you to easily submit questions to them. Instead, the Website provides some information about consumer reports, as well as a Web interface to allow you to order a copy of your ChexSystems consumer report (which we recommend that everyone do!).

Here is the Website address for ordering your ChexSystems consumer report:

Website Address

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Let’s face it … being on the ChexSystems list is expensive! If you can’t get a bank account, you probably spend between $50-$100 each MONTH doing things like cashing your pay or benefits check, paying bills, getting cash, etc. Why wait 5-7 years for your name to get removed from the list? What if I told you that you could get OFF the ChexSystems list?

Even better, what if I told you that you could do it with just a few hours of effort? It’s true. You can. And you should. But it is hard to get the information you need to do it. Luckily, we are happy to announce the Official Guide to Get Off ChexSystems! A simple, easy to follow, guide to getting your name removed from the ChexSystems list. The Guide comes with all of the letters and information you need to get off ChexSystems. You have nothing to lose—the Guide also comes with an amazing money back guarantee! Get the Guide now, and get back to banking!

Get the Official Guide to Get OFF ChexSystems Now!

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