How to Get a ChexSystems Removal From Your Report

ChexSystems serves as a consumer reporting agency for deposit accounts, akin to how credit bureaus track credit history. Financial institutions use ChexSystems reports to evaluate the risk of individuals applying for new checking and savings accounts. Difficulty opening a bank account often prompts individuals to seek information regarding the “removal” of entries from their ChexSystems report.

Obtaining Your ChexSystems Report

Understanding your ChexSystems report is the first step in addressing negative entries. Consumers are entitled to one free copy of their report every 12 months under the Fair Credit Reporting Act (FCRA). This free report can also be requested if a bank denies an account application based on its contents.

To request your report, you can call ChexSystems at 800-428-9623, visit their website for an online request form, or download and mail a request form. The report is typically mailed within five business days.

Upon receiving your report, review it carefully for any listed entries. The report details your banking history, including account closures, outstanding negative balances, bounced checks, and reported fraudulent activity. It also includes identifying information and a consumer score (100-899) indicating your risk level to banks.

Disputing Inaccurate Entries

After reviewing your ChexSystems report, dispute any entries identified as inaccurate, incomplete, or unverifiable. The Fair Credit Reporting Act (FCRA) grants consumers the right to dispute such information, requiring ChexSystems to investigate. Disputes can be initiated directly with ChexSystems, and contacting the reporting financial institution may also be beneficial.

When submitting a dispute, provide a clear explanation of the error and include supporting documentation. This might consist of bank statements, payment records, bank correspondence, or a police report if identity theft is involved. Send copies of these documents, not originals, along with your personal information to help ChexSystems locate your file.

Disputes can be submitted through ChexSystems’ online portal, by mail, or phone. Online submission often allows direct uploading of supporting files. If mailing, certified mail provides proof of delivery and receipt.

ChexSystems is required to investigate disputes within 30 days of receipt. If additional information is provided, this timeframe can extend to 45 days. Following the investigation, ChexSystems will notify you of the outcome. Inaccurate information must be removed or corrected from your report.

Addressing Accurate Negative Entries

For negative entries on a ChexSystems report that are accurate, the process for “removal” differs significantly from disputing inaccuracies. Accurate negative information, such as records of unpaid negative balances, overdrafts, or fraudulent activity, typically remains on a ChexSystems report for a period of five years from the date of the incident. These entries generally cannot be removed through a dispute process, as they are verified as correct.

While direct removal of accurate entries is uncommon, addressing the underlying issue can sometimes lead to an update on the report. For instance, paying off an outstanding negative balance owed to a financial institution may prompt them to update the entry to reflect that the debt has been settled. This update does not remove the entry but indicates that the financial obligation has been met.

Any agreement for the removal of an accurate entry by a financial institution is typically at their discretion and not guaranteed. Such arrangements are rare and usually depend on specific bank policies or the nature of the original incident. Consumers should obtain written confirmation from the financial institution if an agreement is reached regarding the status of a reported item.

Rebuilding Banking Relationships

After addressing ChexSystems entries, whether through successful dispute or by waiting out the reporting period for accurate information, rebuilding banking relationships becomes the next focus. One common option for individuals with past banking challenges is to explore “second chance” checking accounts. These accounts are specifically designed for individuals who may have been denied a traditional checking account due to a ChexSystems record.

Many banks and credit unions offer these accounts, and some do not check ChexSystems reports for second chance account applications. While second chance accounts might have different features, such as monthly fees or limitations on services like overdrafts, they provide a pathway to re-establish a positive banking history. Maintaining a second chance account responsibly, by avoiding overdrafts and managing funds carefully, can eventually lead to eligibility for a standard checking account.

In addition to second chance accounts, utilizing prepaid debit cards can serve as an alternative for managing daily finances without a traditional bank account. These cards allow you to spend only the money you load onto them, preventing overdrafts. Establishing a secured credit card can also help rebuild a financial profile, as responsible use is reported to major credit bureaus. Practicing consistent financial habits, such as maintaining positive balances, avoiding non-sufficient funds (NSF) events, and paying any fees promptly, are important steps to prevent future negative ChexSystems entries.