Finding banks that do not run verification through ChexSystems is important for many consumers, because most of the banks in the nation will not accept clients who are registered in the database. An individual’s name can be there in the Chexsystems database for as long as five years, so it’s important that people find second chance banking in order to have at least one reliable banking source. Direct deposit, PayPal and paying bills online all require a checking or savings account to use their services.
ChexSystems reports are taken very seriously by the banks, and with just a single incident on report, it can be almost impossible to find a credit union or a bank that is willing to work with you.
The short answer is no. ChexSystems works like any other credit bureaus, and will report the incident even when you have paid for the damage. Only the reporting bank can ask ChexSystems to remove an entry before the five-year period has passed.
In cases of minor breach, an individual is sometimes allowed to write checks, at a bank’s discretion. However, if you have also been reported to Shared Check Authorization Network (SCAN), which is owned by ChexSystems, you will have difficulty writing checks.
It is still possible to get a bank account while having your name present on ChexSystems. Again, it depends on your bank or credit union. If they use the Chexsystems database to investigate the applicant and their policy doesn’t allow them to have listed individuals as their customers, you won’t be allowed to open a checking account.
Some banks allow people listed in Chexsystems to open another account while there are others that don’t even check. There are other banks that will allow people to open a prepaid card or virtual checking account.
Individuals that have been reported to ChexSystems still need to do banking, so what can they do? Five years is certainly a long time to wait for opening a bank account, and for most of us banking is more a necessity than a luxury. While the choice is very limited, it is not impossible to find non chexsystems banks.
The first option would be to find a bank that has nothing to do with ChexSystems. While such banks are limited, there are several financial institutions across the country that do not report to or use ChexSystems. These are usually smaller, local banks and credit unions. It may take some looking around to find one, but they are there. Such non chexsystems banks will have limited branches and there won’t be many ATM’s present throughout the nation.
Another option will be to find a bank that entertains people who have been reported to ChexSystems. With more and more people experiencing financial difficulties, many banks have come up with special banking programs for people who have had trouble managing their finances in the past. These programs are often called Fresh Start Accounts or Second Chance Checking accounts.
Generally, these accounts will have severe limitations that customers must adhere to. Deposits, withdrawals and transfers of funds from one account to another are allowed. Sometimes these accounts will require direct deposit from your employer. Debit cards are almost always provided with an account that allows customers to make purchases and withdraw cash from ATMs. Other benefits generally include low maintenance fees with no minimum balance required to be maintained. However, there is a high likelihood that you won’t be able to write checks.
Customers who open a Second Chance account can earn other banking benefits with time. As long as you keep your account in good standing, you may be allowed more banking rights, and in the end, your account might be converted to a regular account.
One last thing to point out to people trying to find a bank to work with them is to be selective. It may be tempting to go from one place to another trying to find a bank that would be willing to allow people to open an account, but it can be a big mistake. Make sure that the bank you have engaged really works with people who have been reported, before it pulls your ChexSystems record. Pulling data again and again from chexsystems database can further worsen your situation, as every time the data is pulled it shows up as an enquiry into your account. Many banks do not work with people that have multiple enquiries conducted.
If you have been reported to Chexsystems, you need to be very proactive. Take time to get in touch with the bank to dispute the record today and start fixing the problem now. It is very difficult to survive without being able to use typical banking services that many people take for granted. You might be able to manage with only a savings account for a short time, but your banking fees will increase gradually to an extent that it becomes unaffordable. The faster you can fix the report and pay the money you owe, sooner you will be able to open a new account.
If you want to be proactive and get your negative information removed from Chexsystems altogether, then be sure to read our free guide to getting out of Chexsystems for good.
Rooting for ya,