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Your ChexSystems Report and Score: What You Need to Know

September 19th, 2017 · No Comments · Credit Bureaus and Scores

by Kristy Welsh

(Last Updated On: January 4, 2018)

Your ChexSystems Report and Score: What You Need to KnowWhether you have a charged-off bank account or you’ve never bounced a check in your life, ChexSystems needs to be on your radar. This consumer reporting agency not only collects information on your banking activity, but can also show evidence of fraudulent bank accounts opened in your name. This not only affects your ability to open bank accounts in the future, but could impact credit applications, so checking your ChexSystems report and score is an important step in the credit repair process.

How ChexSystems works

ChexSystems is a nationwide specialty consumer reporting agency that collects information about banking activity. ChexSystems is similar to the big three credit bureaus in that they:

  • Collect information from data furnishers (in this case, banks)
  • Generate a consumer score from the information on your report
  • Provide your consumer report and score to those with permissible purpose
  • Provide you with a free consumer report every 12 months
  • Provide you with a credit score
  • Investigate disputed items on your report
  • Add a statement to your file if you want to explain negative activity
  • Remove information from your report after a certain number of years (in this case, 5 years)
  • Can place a security alert on your report
  • Can place a security freeze on your report

They are different from the credit bureaus in that they only collect banking activity. There are other consumer reporting agencies that do the same (Early Warning Services, Telecheck), but 80 percent of banks use ChexSystems.

How to check your ChexSystems report and score

There’s no shortage of information out there on the importance of checking your credit reports through Experian, TransUnion, and Equifax. What’s often overlooked, though, is the attention that should be paid to your ChexSystems Consumer Disclosure.

As with your credit reports through the big three national bureaus, your ChexSystems report could include inaccuracies or evidence of fraud.

Dealing with these issues is essential for three reasons:

  • To improve your ChexSystems report, which is checked by banks when considering you for checking and savings accounts
  • To improve your ChexSystems score, which is used by some creditors and lenders when considering you for credit lines or loans
  • To avoid liability for fraudulent bank accounts opened in your name

Your ChexSystems report

According to the Fair Credit Reporting Act, you are entitled to a free copy of your ChexSystems Consumer Disclosure Report every 12 months. (This is the same law that gives you the right to free copies of your reports from the credit bureaus and other consumer reporting agencies.)

ChexSystems offers four ways you can order your Consumer Disclosure report:

Online

By phone: 800-428-9623

By fax: 602-659-2197

By mail:

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

If requesting by fax or mail, use this Consumer Disclosure Request form.

Your ChexSystems score

Though it should not be confused with a credit score, your ChexSystems Consumer Score may be considered by banks, creditors, and lenders. It ranges from 100 to 899, the higher the better.

ChexSystems offers two ways to request your ChexSystems score:

By fax: 602-659-2197

By mail:

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

Use this form to make your request. Expect to receive it, by mail, within 15 business days.

What you’ll find in your ChexSystems report

As with any other consumer report, the content of your ChexSystems report will depend on your history of activity. In general, though, ChexSystems reports include:

  • Personally-identifying information (name, date of birth, address)
  • Consumer ID number
  • Indication of whether you have a fraud alert on your report
  • Indication of whether you have a security freeze on your report
  • Reported information
    • Source (e.g., name of the bank)
    • Date reported
    • Reason reported (e.g., non-sufficient funds, account abuse, suspected fraud)
    • Charge off amount
    • Charge off statute (paid or unpaid)
    • Account closure date
  • Hard inquiries (initiated by you)
  • Soft inquiries (not initiated by you)
  • Check cashing inquiries (data provided by Certegy Check Services)
  • Retail info, like returned checks and certain collection accounts (data provided by Certegy Check Services)
  • History of checks ordered
  • Social security number validation
  • Additional info provided by Lexis-Nexis Risk Solutions

Take a look at a sample ChexSystems report.

How to get off ChexSystems

There are only two ways to have items removed from ChexSystems:

  • They fall offer naturally. As you may know, it takes 7 to 10 years for negative listings to fall off of your reports through the big three national credit bureaus – Experian, TransUnion, and Equifax. ChexSystems, however, deletes negative listings from your report after just 5 years.
  • The bank that reported the negative listing requests that it be removed from your report (the same way it works through the big three). But requesting that ChexSystems remove a listing is not something you should expect the bank to do without good cause. And that good cause would be your dispute of inaccurate information that you discover on your ChexSystems report. If the reporting bank cannot prove it is accurate, it must be removed from your report.

This is not to say listings can’t improve. For instance, if you pay what you owe, a closure status could go from unpaid to paid.

How to dispute items on your ChexSystems report

If you discover inaccurate information on your ChexSystems report, you have the right to dispute it (again, the same way it works through the big three national credit bureaus). What sort of information is disputable? All of it.

Specifically, look for inaccurate listings of:

  • Non-sufficient funds
  • Returned checks
  • Charge-offs
  • Unpaid status
  • Account closures
  • Account abuse
  • Suspected fraud
  • Hard inquiries
  • Bank accounts you do not recognize

When looking for inaccuracies, do not rely on your memory alone. The longer you’ve been banking, the harder it will be to remember every account and all of your activity. So dig up your banking records and check them against your ChexSystems report. If you have no records, or they’re incomplete, err on the side of caution and dispute any negative activity that you don’t remember.

ChexSystems offers four ways for you to dispute an item:

  • By mail (which is what we recommend)
  • By fax
  • Online
  • Over the phone (but only if you are not submitting supporting documentation)

You can also dispute items directly through the data furnisher (i.e., bank).

Disputing by mail

Though it’s not as quick and easy as other methods, we recommend you submit your dispute by mail. Be sure and do so via certified mail with return receipt requested. This way you can verify that ChexSystems has, indeed, received your dispute. You can also use the receipt date to count down the 30 to 45 days it should take them to investigate and respond.

Fill out this Request for Investigation form and mail it (certified with return receipt) to:

ChexSystems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN  55125

Be sure to include any supporting documentation (copies only; hold on to your originals).

How to place a security freeze on your ChexSystems report

While there is nothing you can do to guarantee that fraud will not be committed against you, placing a security freeze on your consumer reports is a pretty effective tactic. When a freeze is in place, this means that no one can access your consumer reports except you.

In the case of ChexSystems, this means that if someone tries to open a bank account in your name, the freeze will prevent the bank from checking your report. The same is true of creditors or lenders who want to look at your ChexSystems score. And without this information, the bank, creditor, or lender will not approve the application. Of course, this also means that when you do want to open a new bank account, you will need to lift the freeze first.

Placing a security freeze on your reports might seem an extreme measure to take, but in the wake of the Equifax hack, it is a step that many credit experts and regulators recommend.

ChexSystems offers four ways for you to place a security freeze on your report:

Online

By phone: 800-887-7652

By fax: 414-341-7445

By mail:

ChexSystems, Inc.
Attn: Security Freeze Department
7805 Hudson Rd, Suite 100
Woodbury, MN 55125

ChexSystems does not provide a form for placing a security freeze via fax or mail, so give them a call for instruction on what to include in the request.

Note, it is recommended that you place security freezes on your other consumer reports, particularly your Equifax, TransUnion, Experian, and Innovis reports. Each of these freezes must be placed separately with each bureau.

Learn more about security freezes.

How to place a security alert on your ChexSystems report

If you believe you have been a victim of identity theft, it’s important to place a security alert (also known as a fraud alert) on your consumer reports. This alert tells potential banks, creditors, and lenders that someone may try and open a fraudulent account in your name. For this reason, they are supposed to contact you before opening a new account, so as to verify that you did, indeed, initiate the application.

That said, a fraud alert isn’t foolproof.

As credit expert Brian Krebs explains, “While lenders and service providers are supposed to seek and obtain your approval before granting credit in your name if you have a fraud alert on your file, they’re not legally required to do this.

This should serve as additional incentive to place a security freeze on your report. There’s no way banks, creditors, or lenders can even access your report without it.

See all of your options for placing a security alert on your ChexSystems report.

How to open a checking account with a bad ChexSystems report

While most banks (and credit unions) rely on ChexSystems, many offer second-chance checking accounts to those with bad reports.

NerdWallet has compiled an impressive list of these institutions. Nationwide banks with second-chance checking include Wells Fargo, Green Do Bank, MemoryBank, and Radius Bank. You will find many more options, though, if you search by regional bank or search by state.

Shop around for second-chance checking the same way you would for any other financial product. Look at fees, minimum balance requirements, and account features (e.g., debt card access, online bill pay, unlimited checking).

The point is, even if you need second-chance checking, you still have choices. So make sure it’s the best second-chance checking you can get.

How to avoid negative ChexSystems listings

Best case scenario, there is nothing negative for your bank to report to ChexSystems in the first place. To that end:

  • Monitor your account balance closely
  • Don’t spend money that your balance can’t cover, be it check or debit
  • Pay all non-sufficient funds fees and overdraft fees
  • If you have a negative balance, get it out of the red as soon as possible
  • Make sure all of your transactions have cleared before closing an account

Handling problems with ChexSystems

If you have any sort of trouble dealing with ChexSystems, the Consumer Financial Protection Bureau (CFPB) wants to hear about it. This is an especially important option during the dispute process. Just be sure to dispute the listing with both ChexSystems and the data furnisher before bringing the CFPB into it, as they want to know that you have exhausted all other options first. Learn how to submit a complaint to the CFPB.

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