Rejected For A Bank Account? Get Your Free Annual ChexSystems Report

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Last week, I heard a co-worker complain about being denied when trying to open a new checking account. I told her to check her ChexSystems report. ChexSystems is a consumer information database that contains information about your banking history, similar to credit bureaus and your credit history. Turns out she forgot about an account and actually owed some other bank some money (probably just piling on inactivity fees…).

For the same reason, you have the right to a free ChexSystems report once a year, just like the annual credit reports. In addition, you can request one whenever you get declined for a bank account where ChexSystems was used.

I decided to get my own as well, and surprisingly it came via snail mail within a week or so. I say surprisingly because last time I tried to order a couple of years ago, I don’t think I ever got it. (I have never had trouble opening a bank account, so I figured nothing bad was on it.)

They have a sample ChexSystems report online, which looks exactly like what I have, and explains all the items they have recorded:

Reported Information
“Reported Information refers to reports of accounts that have been mishandled, reported for cause, and/or outstanding debts. Reported Information is submitted directly to ChexSystems by members of our service, which consists mainly of financial institutions. Our current practice is to retain this information for a period of five years.”

This includes account closed due to repeated bounced checks, or overdraft debts that were never paid. If you have one of these in error, you’ll definitely want to clear it up.

Inquiries Initiated By Consumer Action
“Inquiries Initiated By Consumer Action refers to inquiries resulting from a transaction initiated by you. These include applying for a credit card or completing an application at a financial institution. Please note that the inquiries are part of your credit history and may be included in our reports to others. These inquiries can be viewed for ninety days up to three years. ”

Basically, a list of all banks that applied for within the last 3 years that used ChexSystems to verify me. They included KeyBank, E-Trade, FNBO Direct, WaMu, DollarSavingsDirect, and WT Direct. Banks that I know that I applied for recently that weren’t on the list include EverBank, which makes sense since they used the Equifax ID check service during my application process.

Inquiries Not Initiated By Consumer Action
“Inquiries Not Initiated By Consumer Action refers to inquiries resulting from transactions you may not have initiated, so you may not recognize the source. Members of our service with a permissible purpose include current creditors, pre-approval creditors, and potential investors trying to assess risks. We report these requests only to you as a record of activities, and we do not include any of these requests on credit reports to others.”

The only bank listed here was Washington Mutual. For some reason, they made three inquiries in one day back in 2006. Weird.

Retail Information
“Retail Information refers to returned checks written on an account and certain collection accounts. Retailers and other businesses report this information to Shared Check Authorization Network (SCAN). ChexSystems receives this information directly from SCAN and is not involved in the collection of these items.”

Nothing here, I believe it counts bounced checks reported by merchants.

History Of Checks Ordered
“History of Checks Ordered refers to a record of check orders placed within the past three years.”

Nothing here, either. Probably because I would never order from Deluxe Corp. (which owns ChexSystems) since they are horribly overpriced. I barely make it past the starter checks usually, but if I do need checks I buy them from Costco.

Social Security Number Validation
“Social Security Number Validation indicates the year and state that a particular sequence of digits first became available for issuance. This information does not include the name of the individual to whom the number was issued.”

It says my SSN became available for issuance in 1987. This is interesting, considering I was born nine years before then…

Drivers License Validation, Drivers License Verification
“Drivers License Number Validation indicates whether or not the format of the drivers license number provided matches the requirements set by the state of issuance. Drivers License Number Verification is information provided to ChexSystems by the state that issued the drivers license number. This information, which is limited to certain states, identifies the name and date of birth of the individual to whom the drivers license was issued.”

Added: A smaller competitor to ChexSystems is TeleCheck. To get your free annual report from them, you must call 1-800-366-2425. I called them on 1/11, and they stated that they had no negative information me, so there was nothing to send me.

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  1. The first time I’ve been denied a checking account was last month by Alliant CU. I filled out the Chex request to see what was going on. I got a report a few days latter and I couldn’t see anything in there that would negatively affect me.

    Now the funny part. A few days after that I start receiving emails from Alliant saying welcome and received my welcome package and ATM Debit card. I thought i guess they approved the Savings account but not the Checking account? I didn’t have my account number until a week or so latter, when I received two letters letting me know my website password had been changed/established.

    After finally logging in I see I do have a checking account. I had to call in to request the free checks that didn’t show up.

    Anyways, that’s just my experience.

  2. Interesting, I never knew there was such an organization. I don’t think my file would have much of interest, I haven’t ordered checks in 4 or 5 years for example. Would you use it to check for identity theft?

  3. Yes, you could have some negative information on there that is either from someone accidentally, someone opening accounts in your name and then doing some check kiting, or it could be an old account that you forgot about that accrued a bunch of fees and got reported.

  4. This is the first time I’ve heard of this company, thanks! How is this different from a credit report?

  5. Personal Debt Coach says

    Hey, great post. I am familiar with Chexsystems due to my current occupation; although I hadnt thought about them for a long time. Thanks for the providing the information, to those who are unfamiliar with this territory!

  6. Update: I called the Telecheck number to request my free annual report per FACTA adn they stated that they had no negative information in my file, so there was nothing to send me. I suppose that’s good enough. 🙂

  7. (OT) Jonathan, could you talk a little bit about the best checking accounts for (small personal) businesses?

  8. I was unable to open an online savings account at two different online banks, which I thought was incredibly strange. Why wouldn’t a bank want my money? Turns out because we had just moved, our address didn’t match with the credit bureaus or other reporting agencies records. It actually took several weeks before the information caught up (and I’d even mailed the banks a copy of current utility bills and was still denied), and by then the rates had dropped.

  9. Very interesting article. I had no idea that banks used anything different than the regular credit report. Great information.

  10. jackcrawfish says

    Telecheck now has online report request capability.

    They request not only your SSN but also an ABA and account number of a current bank account owned by you. I was a bit leary of the account number requirement but went ahead with the request.

  11. Nadine Evens says

    Tried to open a joint checking acct. with husband today at Chase. His info. was accepted and mine was declined b/c of ChexSystems, Inc., which I had never heard of before today. We’ve had our checking acct. with B of A for almost 25 yrs., and it’s always been in good standing. The only info. the gal at Chase could tell me was that something was reported back in July 2011. I called B of A and they have no record of reporting anything to ChexSystems. Do you know how something like this could happen to a person with a bank acct. in good standing? I called ChexSystems and they will be sending me my report, but it takes 3 – 5 business days. Do you know of any way that I can find out sooner? Thank you so much!

  12. lonnie williams says

    us bank messed up and put me on chexsystems list, banks put you on bad list, will never help get you off list,,guess they are arrogant don’t need more customers..very upsetting to get bad credit reports ,because of banks stupidity, I paid chexsystems $169.00 in july 2012 they have done nothing,very hard to contact on phone,they don’t answer, message boxes full,i have reported to trade commission,better business bureau.. no one can do anything if chexs refuse to respond,,,its like we cant do anything to crooks& cons

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