How to get off ChexSystems
If you’ve ever had a checking or savings account, you probably have a ChexSystems® file. ChexSystems is a national consumer-reporting agency that compiles and maintains files on problems that consumers may have had with checking and savings accounts (e.g., account misuses, fraudulent activity, and unpaid negative balances).
If you have negative account balances or owed money to a bank or credit union, the information may have been reported to your ChexSystems®. Based on the information in your ChexSystems® file, a bank could refuse to let you open a new account.
If you have been turned down for a new checking or savings account, the first thing to do is to check your ChexSystems® report for errors. You are entitled to make a ChexSystems dispute and ask for ChexSystems removal.
Read-on to learn how to clear your ChexSystems report.
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What is ChexSystems?
ChexSystems collects information regarding applications for new
checking accounts, checking account openings or closings, and check-writing history (including bounced or returned checks). This information, along with a "risk score,” is provided to credit unions and banks every time you apply for a new account.
Important ChexSystems information to know:
ChexSystems consumer score. According to ChexSystems, your ChexSystems Consumer Score is based on information contained in your consumer file. By reviewing the key factors that impact your score, you can gain a better understanding of your score.
ChexSystems consumer disclosure. Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer disclosure report, upon your request, at a minimum once every 12 months and more frequently under certain conditions. To request your free report, follow the instructions provided below to submit online or select the ‘Other Methods’ tab for instructions on how to submit through mail or telephone.
ChexSystems® provides all consumer disclosure reports free of charge. You can request a report to learn what information, if any, is listed in your consumer file at ChexSystems. If you have been denied an account and ChexSystems was used in the decision process, this information will help you understand what may have contributed to that decision.
How to get removed from ChexSystems
Anyone who is in the ChexSystems
® database can request a ChexSystems removal, which would remove your information from the ChexSystems® database.
Here’s how to start a ChexSystems dispute and ask for ChexSystems removal:
Request your report
Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your
consumer disclosure report, upon your request, at a minimum once every 12 months and more frequently under certain conditions. You can request a report to learn what information, if any, is listed in your consumer file at
ChexSystems. If you have been denied an account and ChexSystems was used in the decision process, this information will help you understand what may have contributed to that decision.
Dispute errors. You have the right to dispute any information contained in your consumer file at ChexSystems.
Pay off debts. After you’ve paid off any debts that are causing a negative report, you can request that the credit union, bank, or collection agency remove the record from your ChexSystems report.
Ask creditors to update information. Most people want to know how to get out of ChexSystems. If you owe money to a financial institution, you’ll want to know how to clear your ChexSystems report. The easiest way is to pay off the debt and ask the creditor to report that you've paid the debt. When ChexSystems receives an account status update from the source of the information, the report will be updated, but the record will remain on file.
Wait five years. ChexSystems retains records of reported information for a period of five years from the report date unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law or policy.
How to dispute ChexSystems errors
You have the right to seek a ChexSystems dispute. According to ChexSystems, you can order a report to learn what information, if any, is listed in your consumer file at ChexSystems. If you have been denied an account and ChexSystems was used in the decision process, this information will help you understand what may have contributed to that decision.
Review your ChexSystems report for errors.
There are mainly three types of errors that can cause a report to be inaccurate:
- Fraud. This can occur if your debit card or check book is lost or stolen and someone makes unauthorized purchases or withdraws money from your account.
- Identity theft. If you are a victim of debit card fraud or your debit card or check book is lost or stolen, someone could open an account in your name or use your information in other criminal ways.
- Bank mistake. An error in your bank’s reporting of your account activity could result in a ChexSystems error.
Disputes may be made by phone, e-mail, or mail. If you choose to mail your dispute, follow these steps:
Mark error in your ChexSystems report. Make a copy of the report you received and circle or highlight the error(s).
Write a request for validation letter. This is the first letter to send. In it you will request proof of the information (from a credit union or bank) that shows the transaction or incident that is reported.
Mail your documents. Include all relevant documents, including an explanation of the error in question and why you believe the information should be removed.
Mail to:
ChexSystems, Inc.
Attn: Consumer Relations
P.O. Box 583399 Minneapolis
MN 55458
Wait for a response. An initial response may take two weeks or longer. Reinvestigations are usually completed within 30 days. If you provide additional information or documentation relevant to the dispute while the reinvestigation is pending, the time frame may be extended by up to 15 days to give the source sufficient time for review.
Send a "Demand for Removal" letter. If ChexSystems does not respond within 30 days of receiving your dispute letter, it is legally obligated to remove the error/disputed information from your report, regardless of whether the disputed information is found to be accurate, or not.
Send a "Procedural Request" letter. If you are successful in the dispute of an error but the error isn’t removed from your report, you may send a Procedural Request" letter, asking ChexSystems to provide you with a description of the procedure used to determine the accuracy and completeness of the bank's information. You may also request to receive copies of the documents your credit union or bank shared with ChexSystems regarding the disputed information.
What to do if your dispute is unsuccessful
You may:
- File a complaint with the Consumer Financial Protection Bureau.
- File a lawsuit under against ChexSystems, the credit union or the bank.
- Submit a statement related to any item of information contained in your consumer file.
First, a Consumer Statement form must be completed and submitted. Request and submit the form to: ChexSystems Consumer Relations, P.O. Box 583399 Minneapolis, MN 55458. If you would like assistance in writing a clear summary of your dispute statement, please contact ChexSystems at 800-513-7125.
What to do if you're denied a bank account
If you are
denied a bank account, don’t give up.
Second chance bank account. Many credit unions, banks and online banks offer second chance accounts to people with
bad credit or other blemishes on their accounts.
Prepaid debit cards. A prepaid
debit card contains only the amount of money you paid for it (less any fees) and cannot be used at an ATM. Prepaid cards are reloadable and can be used at the register and online to pay bills and make purchases. Prepaid cards are available from Mastercard, Visa, and other credit providers.
FAQs
How long do you stay on ChexSystems?
ChexSystems retains record of reported information for a period of five years from the report date unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law or policy.
Is it possible to get a bank account if you're on ChexSystems?
Yes, some credit unions, banks and online banks provide “second chance” accounts to people with blemished account histories.
Can I get a free copy of my ChexSystems report?
Yes. Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer disclosure report, upon your request.
Visit ChexSystems to make a request.
How do you know if you have a ChexSystems file?
The only way to know is to request a report to learn what information, if any, is being held with your name. You must be 18 years of age or older to communicate with ChexSystems.
Is ChexSystems legitimate?
Yes. Chex Systems, Inc. (ChexSystems) is a nationwide specialty consumer reporting agency under the Fair Credit Reporting Act (FCRA).
Do credit unions use ChexSystems?
Not all credit unions use ChexSystems, but some do. Ask a Member Services Representative if the credit union you bank with uses ChexSystems.
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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