Chexsystems is a reporting agency that is very similar to the credit bureaus. Banks will report you to chexsystems if you have had a checking account closed with unpaid fees, providing false information, or fraud.
Sounds like every person listed in chexsystems is a real dirt ball right? No! Even beyond the realities of real world financial hardship, there are just as many instances if not more of legitimate debit card fraud and the bank did not conduct a proper investigation, thus finding the account holder incorrectly responsible for the fraudulent charges.
How can that be true when I see cards offering fraud liability, all the time? We are unable to answer this question, but must mention there are multiple reports of consumers with what we believed was overwhelming evidence of a fraudulent charge, yet the bank and their fraud department found the consumer ultimately responsible.
What Does It Mean For Me To Be In Chexsystems?
First and most importantly if you get listed with chexsystems you are not going to be able to open a new checking account with ANY bank! Instead you will be destined to buying money orders and having to pay check-cashing fees. There are estimates that an individual living with chexsystems, spends over 7.71 every year on fees.
In the past if you were in chexsystems, it was possible to open a checking account at a smaller local bank, however today the local banks no longer exists. Many local banks were forced to merge with larger banks as a result of the mortgage collapse and subsequent economic crisis we have seen in recent years.
How Long Will I Be In Chexsystems?
Your information will be listed in chexsystems for 5 years. You can dispute your chexsystems listing, however unlike with your credit report, it is almost impossible to win a dispute and get removed from chexsystems. The rare occasions that we have witnessed are when individuals have been a victim of identity theft with the documentation and evidence to prove it.
Are There Any Banks Without Chexsystems?
While there are no longer any banks that we are aware of, that don't check chexsystems today. However if there are some smaller local banks in your general area is worth trying to open an account.
It may be in your interest to go ahead and be upfront with the bank and ask if they use chexsystems. Sometimes you may be initially given a checking account but only to be contacted by the bank and go through the embarrassing experience of hearing they will be unable to proceed and provide you with an account.
What About Bad Credit Checking Accounts?
You can be approved for a prepaid debit card, this can be used just like a checking account for bad credit. It is exactly like a bank ATM or check card. You can use it online and over the phone, just like any major Visa or MasterCard.
The best prepaid debit card offers we have seen will give you direct deposit without any fees, which can save you a bundle of money on check-cashing fees. You can also pay your bills by using online bill pay, another service that is given to you without any fees from the best debt cards. This service is just like a checking account online bill pay program, all you need to do is fill in the name of the business you want to pay, the amount, and the date you want the payment sent.
It is essential for you to do your homework before you apply for any debit card because many of these prepaid debit card offers have very different fees, and benefits. We have seen some prepaid cards that will provide you with direct deposit, online bill pay, and if you deposit a relatively low amount of money every month you will not have to pay any monthly fees.
The only other option is to ask a friend or relative to literally cosign for a checking account for you. This means your cosigner will be potentially responsible for any overdraft fees or charges that you may incur due to your account use. There are too many reasons to list but we strongly recommend you not choose this route, many friendships and relationships have been ruined over money.