How to Clear Up Your ChexSystems Report

Bank teller interacting with a customer
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Having issues opening a bank account? Then you may have a record on ChexSystems, a database that banks use to check whether potential customers have outstanding accounts at other banks. You also may have a ChexSystems report if you have a history of bouncing checks or mishandling your accounts.

When you apply for a new account, banks and credit unions will run your name through ChexSystems and may choose not to open an account for you based on the information they find. The good news is, if you find you have a history on ChexSystems, there are ways to clear up your report.

Obtaining a Copy of Your Report

You can obtain a copy of your ChexSystems report by visiting its website and requesting one. The Fair and Accurate Credit Transaction Act entitles you to one report per year.

This report will show the banks that have reported you to ChexSystems. There will be a list of accounts that have been closed by the bank, as well as any money you still owe. The account history will stay on your report for five years, but you can pay off outstanding balances owed to the banks. Once you do this, many banks may consider opening an account for you.

Paying Off Balances at the Banks

Once you see what you owe and to whom, then you then can begin to make debt payments to pay off any balances owed. You may even be able to get some of the balances lowered. Try visiting the bank and talking to a customer service representative. They may be willing to waive all or some of the charges for you, depending on the circumstances. If nothing else, they can explain what the charges were and how long your account was in the negative.

Keep in mind that you will need to contact each bank separately and work with them to pay off any balances. You can either save up to pay off each balance in full or talk to the bank about setting up a payment plan. Once the balance is paid off, request that each bank report to ChexSystems that the account has been paid in full.

Disputing a Fraudulent Account

There is also the possibility that someone opened an account in your name without your permission or knowledge, also known as identity theft. If that person mismanages the account, it could show up on your ChexSystems report. You need to take several steps to dispute this and have the account removed from your ChexSystems report. You also should pull a copy of your credit report and check for signs of identity theft there, as well.

If you find evidence of identity theft on your ChexSystems or credit report, take the following steps to remediate the issue:

  1. Contact the bank and explain that you did not open the account. You should also ask for basic information about the account so you can file your police report.
  2. File a police report and explain that you did not open the account and that your identity was stolen. You will need a copy of this report for your own records, and one for each bank or credit card company where an account was opened fraudulently.
  3. Send the police report to the bank, then contact the credit bureaus and ChexSystems, explaining that the account was opened as a result of identity theft. You will also need to dispute the account and fraudulent charges, which ChexSystems allows you to do online, via mail, or by fax. Keep in mind that this process can take up to 30 days.

Living Without a Bank Account

If you have a report on ChexSystems, you may not find a bank or credit union willing to open a checking account for you until you clear up the issues. It can be difficult to live without a checking account and takes careful planning. You may not even qualify for prepaid credit or debit cards. To pay your bills, you may need to use money orders. You will also have to find a place that will cash your paychecks for you. It's not easy, but it can be done.

If you are careful to budget and save money each month, you can begin to fix the situation. Once you clear up your outstanding balances, you may be able to clean up your ChexSystems report.

Once you get your report in better shape, you can open a checking and savings account, which will make managing your money that much easier. Be sure to keep your account in good standing so you don’t find yourself in the same situation in the future.

Updated by Rachel Morgan Cautero.

Article Sources

  1. ChexSystems. "Frequently Asked Questions (FAQ's)." Accessed Feb. 11, 2020.

  2. ChexSystems. "Dispute Information." Accessed Feb. 11, 2020.