How to Open a Savings Account in ChexSystems

What does it mean if you have a negative report on ChexSystems? In truth, this can feel a little bit like being "blacklisted" for past financial mistakes. It's helpful to know exactly what ChexSystems is all about before you try to use banking products and services. You aren't necessarily shut out from doing basic things like opening a savings account; however, you should be prepared for the obstacles that can pop up.

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ChexSystems is a consumer reporting agency used by banks when they're estimating the financial risk level of each potential customer. The easiest way to look at it is to compare your ChexSystems data to the credit report that a lender might pull up when you're applying for a mortgage. Banks use ChexSystems to determine how much risk there is in allowing someone to open a checking or savings account. Yes, banks will sometimes use your ChexSystems status to deny you a bank account.

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Nearly everyone who has ever opened a bank account in the United States has a ChexSystems record. However, your record is likely very uneventful if you always keep a positive balance. It's only when you make a banking mistake that your report gets interesting. You don't have to be any kind of fraud mastermind or financial delinquent to end up with a negative mark on ChexSystems; unfortunately, one miscalculation for your bank account can get you dinged.

For instance, you might pull $100 from your account at the ATM when heading out for a weekend with friends. This seems perfectly fine because your balance is $300. What you forget to consider is the $250 check you wrote to the car mechanic that's going to clear any minute. This scenario ultimately makes your account overdrawn by $50. This completely unintended and innocent infraction will get you a negative mark on ChexSystems.

Here's a longer list of reasons why you might be reported to ChexSystems:

• Accounts closed for fraud/bad checks
• Bounced checks
• Overdrafts
• ATM abuse
• Excessive applications for bank accounts during a short window
• Unpaid negative balances

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ChexSystems will use what's reported against you to come up with a risk score. This score that falls somewhere between ​100 and 899​ is very similar to your personal credit score. However, ChexSystems doesn't reveal exactly how each consumer's score is calculated based on the weight of various offenses.

You don't necessarily have to accept the fact that you're locked out from getting a bank account if you have a negative report on ChexSystems. There's actually a lot you can do to pad the blow to your banking potential.

First, you want to make sure that the cause for your ChexSystems ding is actually valid. As a consumer, you have every right to view your own ChexSystems record. Here's the process for checking ChexSystems:

• Request your free ChexSystems report on the ChexSystems website. If you prefer not to make a request online, you'll see options for making your request by phone, mail or fax on that page.
• Once you receive your ChexSystems report, scan it for any errors.
• If you spot any errors, write a letter to ChexSystems asking to have the errors removed. Additionally, write a correction letter to the financial institution that reported your infraction. Reporting agencies have a legal duty to correct or remove inaccurate reports within ​30 days​ of being notified.

It's also possible that the negative marks on your ChexSystems report are accurate. In this case, you'll need to come up with a strategy for being approved for a bank account. One thing to remember is that savings accounts are considered much less risky for banks than checking accounts. You may want to focus on building up your relationship with a bank by starting with a savings account.

You also have a few other options if that doesn't work. First, 80 percent of financial institutions use ChexSystems. You may be able to get around the problem by applying for accounts at ones that don't use it. This is usually smaller banks and credit unions.

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You can also ask for something called a second-chance bank account from a bank. These are carefully restricted accounts that allow you to use some features of a typical bank account with higher fees and fewer perks. However, you are working your way back to being able to fully participate in the banking system. A prepaid debit card is another option that allows you to make electronic payments that are already backed by cash with no risk of overdrafts.

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