If you’ve ever been denied a bank account, it is likely because of negative actions in your ChexSystems report.
ChexSystems is a consumer reporting agency that collects information on the opening and closing of consumer checking, savings and other deposit accounts, including the reasons for the closures. It operates under the Fair Credit Reporting Act and works similarly to a credit agency.
CNBC Select breaks down how ChexSystems works and reviews some alternatives if you don’t qualify for more traditional bank accounts.
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What is a ChexSystems report?
ChexSystems works similarly to a credit bureau. It collects a large amount of banking data and reports it to financial institutions so that they can assess the riskiness of a consumer before approving them for a new account.
Your risk level for owning a deposit account is translated into a ChexSystems Consumer Score (also called QualiFile score). Scores range from 100 to 899, with higher numbers meaning a lower risk profile and better approval odds. Viewing your Consumer Score requires an additional request form, and ultimately, might be less useful than the report itself as it doesn’t show you the root of any potential issues.
However, it’s important to note that not everyone has a ChexSystems report. For example, if you have a clean banking history or never had an account closed for a negative reason, your name is unlikely to be listed in ChexSytems.
If you have a clean banking history, you should have no trouble getting approved for most of the best checking and savings accounts, such as Citi® Access Checking, Discover Cashback Debit Checking and LendingClub LevelUp Savings.
Citi® Checking Accounts
Deposit products are provided by Citibank, N.A. Member FDIC.
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Monthly maintenance fee
There are two types of Citi checking accounts, Access Checking (no checks) and Regular Checking (unlimited check writing). Access Checking has a $5 monthly service fee, with options to waive; Regular Checking has a $15 monthly service fee, with options to waive as well.
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Minimum deposit to open
There is no minimum deposit to open a checking account with Citi.
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Minimum balance
No minimum balance requirements but, accounts with a zero balance for 90 calendar days are subject to closure.
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Annual Percentage Yield (APY)
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Free ATM network
Access to more than 2,300 Citibank ATMs and over 60,000 other surcharge-free ATMs in the U.S.
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ATM fee reimbursement
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Overdraft fee
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Mobile check deposit
You may be eligible for a cash bonus when you complete required activities – click here for details.
Discover® Cashback Debit Checking
Discover® Bank is a Member FDIC.
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Monthly maintenance fee
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Minimum deposit to open
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Minimum balance
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Rewards
1% cash back on up to $3,000 in debit card purchases each month. See website for details by clicking “Learn More”.
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Free ATM network
60,000+ Allpoint® and MoneyPass® ATMs
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ATM fee reimbursement
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Overdraft fee
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Mobile check deposit
LendingClub LevelUp Savings Account
LendingClub Bank, N.A., Member FDIC
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Annual Percentage Yield (APY)
5.30% (with monthly deposits of at least $250), or 4.80%
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Minimum balance
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Monthly fee
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Maximum transactions
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Excessive transactions fee
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Overdraft fees
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Offer checking account?
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Offer ATM card?
What is on a ChexSystems report?
A ChexSystems report could contain a wide variety of information relating to your banking history, such as:
- Number of accounts you’ve applied for recently
- Involuntary checking or saving account closures
- Unpaid negative balances and fees
- Bounced checks and overdrafts
- Suspected fraud or identity theft
- Who has viewed your ChexSystems report
ChexSystems focuses on forcibly closed checking and savings accounts, so it doesn’t track active bank accounts or accounts you closed voluntarily with no history of mishandling. ChexSystems reports also don’t include information like criminal records, employment history or rental history.
Information generally stays on your ChexSystems report for five years, but it may be removed sooner in special circumstances.
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How to get a copy of your ChexSystems report
There are three ways to request a copy of your ChexSystems report:
You are entitled to request a free copy of your ChexSystems report at least once every 12 months, and sometimes more often depending on your circumstances. If you believe any of the information in your report is inaccurate, you can file a dispute, either to the source of the inaccuracy or via ChexSystems who will reach out on your behalf.
It’s good practice to regularly check your ChexSystems report as it can help you spot signs of fraud or identity theft. Alternatively, you can automate some of this with an identity theft protection service. One of CNBC Select’s top-ranked identity theft protection services, Aura, offers protection against financial fraud and identity theft, as well as many other perks like credit monitoring.
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What can I do if I am denied a bank account?
Federal law requires banks or credit unions to tell you why you were denied a bank account. Generally, the reason you may be denied a bank account is due to negative information on your ChexSystems report.
If you are denied a bank account, ask the bank to reconsider your application and try to explain your situation better. If you were denied because of your ChexSystems report, requesting a copy of the report can help you identify specific areas of improvement and ensure there are no inaccuracies.
Cleaning up your ChexSystems report can take some time. As you fix your banking profile, you may want to consider a second-chance account. Second-chance accounts generally don’t use ChexSystems reports when considering their applicants, which means you’ll have a better chance of getting approved.
If you’re having trouble getting approved for a traditional bank account and are searching for a second-chance checking account, consider Chime Second Chance Banking* or Chase Secure Banking℠. The Chime account stands out for not having many common banking fees, while the Chase one is unique for offering a welcome bonus.
Chime Second Chance Banking
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Monthly maintenance fee
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Minimum balance
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Free ATM network
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Overdraft fee
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Minimum deposit to open
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Annual Percentage Yield (APY)
Chase Secure Banking℠
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Monthly service fee
$4.95 or $0; Avoid the monthly service fee when you have electronic deposits made into the account totaling $250 or more during each monthly statement period.
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Minimum deposit to open
No minimum deposit to open an account and get started plus no overdraft fees with a Chase debit card that helps you stay within your balance.
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Minimum balance
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Annual Percentage Yield (APY)
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Free ATM network
Bank from anywhere with access to more than 15,000 Chase ATMs, more than 4,700 Chase branches, the Chase Mobile® app and Chase.com.
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ATM fee reimbursement
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Overdraft fee
No need to worry about overdraft fees – Chase Secure BankingSM allows you to spend only the money you have available.
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Mobile check deposit
JPMorgan Chase Bank, N.A. Member FDIC.
FAQs
How do I clear my ChexSystems?
While there’s no way to clear your ChexSystems report, you can take steps such as paying off any outstanding balances or other positive actions, and you can specifically request these be noted in your report.
What bank does not use ChexSystems?
Can I check my own ChexSystems report?
Yes, everyone is entitled to at least one free copy of their ChexSystems report every 12 months.
How long does a bad check stay on your record?
According to ChexSystems, it retains all accurate information on its reports for five years, but there are situations where it could be removed sooner.
Can your ChexSystems report impact your credit score?
No, your ChexSystems report can not directly affect your credit score, but some information it contains can overlap with some credit score factors. For instance, a recorded negative balance on a checking account would show up on your ChexSystems report and is also a factor in determining your credit score.
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*Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
