How to Fix Your Checking Account Report

How to Fix Your Checking Account Report
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Your checking account report, more commonly referred to as your ChexSystems report, is set up similar to a credit report. The purpose of ChexSystems is to help U.S. banks and credit unions protect themselves against consumer fraud.

However, if you’re reported to ChexSystems, then your ability to get a checking or savings account is severely limited for at least the next 5 years. You can be reported to ChexSystems if your bank has "cause," meaning anything from negative balances to excessive overdrafts to fraud.

If you have negative items on your ChexSystems report, it’s likely you want to get those notations off your report so you can get a checking account. However, it can take a lot of time and work to fix your checking account report.

Request your free report from ChexSystems. The company is required to give you at least one free report per year, just like with credit reports. You can also receive a ChexSystem report if you were denied a bank account due to an adverse entry on your report.

The report can be requested over the phone or through their website and it takes a couple of weeks to arrive via the U.S. Postal Service.

Review your ChexSystems report closely. The report is broken down into sections. The main sections you’ll want to pay attention to are the Reported Information, Inquiries Initiated By Consumer Action, Inquiries Not Initiated By Consumer Action and Retail Information sections.

The Reported Information section contains derogatory information submitted by your bank, including excessive nonsufficient funds and fraud. The Inquiries sections list financial institutions that have accessed your accounts, either with your permission or not. The Retail Information section lists checks that were returned as nonsufficient funds from your bank.

Tackle the derogatory information. In order to fix your ChexSystems report, you’ll have to have the derogatory information either updated to show that they were paid off or removed completely. This is difficult to do, because banks aren’t required to remove information from your report for 5 years after it’s first reported.

If the entries listed on the report are correct and not a result of identity theft, then your best bet is to contact the bank and make payment arrangements to settle any outstanding debt you owe the bank or retailer. Then, as a part of the payment arrangements, ask the bank or retailer if they would consider removing the information from your ChexSystems report as a goodwill gesture. If they’re not, ask if they’ll at least update the entry to show as "paid" on your report. This is better than allowing the derogatory information on the report to remain as is after settling your account.

Open an investigation on fraudulent entries. If you believe your ChexSystems report contains incorrect information, then your best step is to dispute that information with ChexSystems directly.

To dispute, draft a letter to ChexSystems that contains all of your contact information and your unique ChexSystems identification number (listed on your report).

In the body of the letter, list the entries on your report that you believe are fraudulent. Ask ChexSystems to open an investigation regarding these fraudulent entries (they are required to investigate according to the Federal Fair Credit Reporting Act).

End the letter by asking ChexSystems to send you the outcome of their investigation within a reasonable period of time (usually 30 business days or so). They’ll either respond asking you for more information to help their investigation or they’ll send you an updated report.

Prevent problems from happening again. Now that your ChexSystems report is updated, maintain good money habits to keep your checking accounts in good standing. Consider developing a budget that allows you to keep money in your accounts so you won’t have to worry about getting overdrafts. If you’re not sure where to start, consider asking a friend or family member for help. Or, enlist the services of a financial advisor you can trust to give you good money advice.

Tips

  • Always send correspondence, no matter if it's with a bank or ChexSystems, through certified mail with return receipt requested. This gives you a way to track that your letters arrive at the intended location and proof that they arrived. Don't give up. It may seem like cleaning up your ChexSystem report is impossible, but it takes time. Keep working hard and over time you'll end up with a clean report and a better financial outlook.

Warnings

  • Never dispute accurate information with ChexSystems. Disputing information that is actually true is considered fraud and you could end up in legal trouble if it's determined that you knowingly disputed accurate entries on your ChexSystems report.