But maybe you’re wondering, “why does chase use ChexSystems? To prevent fraud and loss of customers’ funds, banks have strict financial regulations, including reporting checking irregularities through common credit bureaus like ChexSystems.
Therefore, credit check banks won’t let you re-enter the banking community if your ChexSystems report reveals past financial issues. But there are some non-ChexSystems financial products like the Wells Fargo opportunity checking account.
So, to help boost your overall banking eligibility, we’ve reviewed the best Banks That Don’t Use ChexSystems and everything around that topic. Meanwhile, if bad credit is an issue, follow our detailed guide on second chance checking with no opening deposit.
What Is ChexSystems?
ChexSystems is one of the consumer reporting organizations. It is similar to credit bureaus such as TransUnion, Experian, and Equifax. But instead of looking into your credit history, the agency keeps records of your banking activity. So, if you apply for a checking account, many banks will run your ChexSystems report to see if you can be trusted to manage the account responsibly.
Why not take your word for it? All customers are not created equal, especially as far as honesty goes. Therefore, instead, banks inquire from ChexSystems about your banking records, including overdrafts, bounced checks, and other past negative banking activities.
The reporting agency acquires this info from their bank and credit union networks that share consumers’ banking data. With that, ChexSystems can analyze the data and use it to calculate your risk score.
It can be challenging to find banks that don’t use ChexSystems report because nearly 80 percent of financial institutions rely on those records for customer eligibility. The 20 percent of non-ChexSystems banks may rely on other reports like the Early Warning System and TeleCheck to see if you qualify for a checking account.
How Does ChexSystems Work?
Similar to the three credit bureaus, ChexSystems works with a network of credit unions and banks to collect records of your past financial activities. But unlike credit reporting agencies, ChexSystem’s information focuses on your banking records. With this data, ChexSystems can generate a risk score and a report. It helps banks to see if you’re eligible for a checking account.
ChexSystems calls this report a consumer disclosure. It has basic identification details plus records of any negative banking activities. Some of the common features in a ChexSystems report are:
Possible fraud activity
Public records about your checking account
Unpaid negative account balances
Be sure to get your free ChexSystems report once annually, and confirm any anomalies. The negative items will remain in your report for several years. This can prevent you from opening a checking account with other ChexSystems banks.
How do I know if I’m in ChexSystems?
There are different ways to tell if you’re in ChexSystems. Most customers with a checking account almost certainly will find their records with the agency. However, there are some non-ChexSystems banks and credit unions too. To be sure, you’ll want to find out from your financial institution if they share consumers’ data with ChexSystems.
Contacting both previous and present checking account providers can be a lengthy and complicated process for some people. Luckily, there’s an easier and faster way to determine if you’re in ChexSystems. The consumer reporting agency allows anyone to access their report once every 12 months.
Submit a request online on the ChexSystems site for a free report. Another way is to reach the agency by telephone at 800-428-9623 to get your report. You can also contact them through the mail using the address below:
ChexSystems, Inc.Attn: Consumer Relations7805 Hudson Road, Suite 100Woodbury, MN 55125
How Long Does ChexSystems Stay on Record?
Any negative item on the ChexSystems report will stick with you for five years. That’s why it’s important to review your ChexSystems at least once every year. Fortunately, the federal law entitles every consumer to a free ChexSystems report once every 12 months.
Banks need to screen new customers before doing business with them. But unlike credit reports with both positive and negative records, ChexSystems solely reports negative banking activities. Therefore, a single banking mistake can get you on the negative side of things with no positive info to counter it.
Always remember to check if a negative activity is ready to leave your report. While that information should only stick on your account for sixty months, all organizations are not equal. Some consumer reporting agencies may not automatically drop off outdated items from your report. Don’t allow that one-time error to stop you from opening a checking account.
What Are the ChexSystems Scores?
We’ve told you that ChexSystems generates a customer’s report along with a score upon request. It reflects the level of risk you pose to a bank should they elect to do business with you. The risk score usually starts from 100 to 899. And the higher your score, the lower risk you pose as a prospective banking client.
So, you’ll want as much as possible to keep away from the lower end of that scale. Contrasting a credit score, the ChexSystems risk score system doesn’t have a set range of scores for grading bad, excellent, good, or average. The reason is that ChexSystems does not make public its internal metrics for measuring risk scores.
Just like no-credit consumers, there are chances some customers don’t have a ChexSystems risk score. Similarly, if you have an excellent banking history, there may be no negative item reported to ChexSystems. Without negative data in the database, the agency can’t generate a score for you.
Benefits of Banks That Don’t Use ChexSystems
You can get a chance to re-create a banking profile through banks that don’t use ChexSystems reports. With a negative item following you for up to five years, getting through life dealing with daily financial transactions can be a nightmare. Having traditional savings and checking account comes with real benefits you won’t find in banking alternatives such as check-cashing services and prepaid reloadable debit cards.
Here are some perks to reap from non-ChexSystems banks:
1. Minimize charges to cash checks
You can skip check-cashing services and save money down the line. Walmart, for instance, will ask you to pay $4 when cashing checks of up to 1,000 dollars.
2. Save on prepaid debit card charges
While prepaid debit cards make a solid option for unbanked consumers, they come with tons of fees. The NetSpend prepaid debit card has $9.95 in monthly fees plus another $3.95 for reloads and $2.50 in ATM withdrawal charges. Avoid the myriad charges by opening a checking account with banks that don’t use ChexSystems.
3. Keep your funds safe
Banks offer a safe, convenient place to store your money. Strange as it may sound, some people don’t bank their money, which can be dangerous. Many people have lost funds they saved at home to theft and fires.
4. Insure your money
All banking customers can rest assured that their funds have a cover of up to $250,000 through the FDIC. Since all banks are not FDIC-insured, use this tool to find banks with FDIC insurance.
5. Integrated fraud protection
Getting a debit card from a bank offers protection against theft or loss. Although prepaid debit cards can provide similar protection, some issuers don’t include fraud protection in their cards.
6. Improve your relationship with the bank
You can re-establish a relationship with your banker through non-ChexSystems banks. Consider engaging in relationship banking, for example. In doing so, the bank can give you better offers on insurance, certificates of deposit, loan rates, and other investments.
Top 10 Best Banks That Don’t Use ChexSystems
Finding a new bank to open an account might be hard if you’ve previously had problems with your checking account. From excessive overdrafts to multiple bounced checks, there are tons of reasons why ChexSystems may have you blacklisted. Opening a bank account can be challenging since most financial institutions rely on the ChexSystems report to track applicants’ checking histories.
Fortunately, you don’t have to go for five years with no bank account. Hundreds of popular banks don’t use ChexSystems to determine a customer’s eligibility. Here are ten of the best non-ChexSystems banks.
1. Chime Online Spending Account
Do you want the convenience of mobile banking? Chime is one of the many online-only banks that don’t use ChexSystems to qualify customers. Besides, they don’t run credit checks when you apply for an account. And the $0 account opening fee is the icing on the cake. The only caveat is that you can only load funds by physically visiting the nearest Green Dot location.
Features of the account
No monthly service fees
Free Visa debit card
Get daily updates on your balance
No overdraft charges
$0 deposit to open an account
$0 minimum balance required
Up to two days early payment with direct deposit
Fee-free ATM services at over 38,000 nationwide locations
2. SoFi Money Cash Management Bank Account
With this cash management account by Sofi Money, you are able to write checks, deposit funds, use electronic bill pay, and even transfer money. You stand to earn a cash bonus of $50 by signing up and depositing a minimum of $500 in your account. The only downside is that it’s an online-only bank with no physical locations.
Features of this account
Unlimited ATM fees reimbursements
Access financial advising and career guides as a SoFi member
No overdraft fees
Fee-free P2P payments
Remotely freeze your debit card
High-yield interest account
No monthly maintenance fees
Integrated bill pay
3. First American Bank
If other banks have turned down your application, you’ll get a second chance checking account with First American Bank. The bank boasts at least 53 physical locations in Wisconsin, Illinois, and Florida, with about $5 billion in assets.
Features of this account
Free Mastercard debit card
$9.95 monthly maintenance charges
Fee-free online and mobile banking services
An opening deposit of $50
4. Suntrust Bank Checking Account
Suntrust bank has numerous checking account offerings. The best part is that it’s one of the banks that don’t use ChexSystems for account opening. And all their checking accounts need a $100 opening deposit and a $7 monthly maintenance fee. Waive your monthly charges by setting up a minimum of $500 every month in direct deposits. Alternatively, you can maintain a daily balance of at least $500 to skip on monthly fees.
Features of this account
Free mobile banking
Balanced banking system
Free online banking
Essential checking services
5. Renasant Bank
It is highly recommended for flexibility and offering second chance banking to customers with a negative ChexSystems report. And if negative banking history is an issue, this bank doesn’t check consumers’ records with the TeleCheck or EWS. You’ll need to put down a minimum of $50 to open an account. Also, you will be charged $8 monthly to maintain your account if you don’t keep a minimum balance of $500 daily or register for eStatements.
Features of this bank account
Free Mastercard debit card
Unlimited check writing
Online bill pay
6. BBVA Online Checking Bank Account
If you’re looking for banks that use ChexSystems and bad credit is an issue, then this online checking account by BBVA is for you. You can open the account in all states save for Hawaii and Alaska. Even better, you’ll get to enjoy free mobile deposits, bill pay, Visa debit card, checking services, and online banking. By offering a second chance checking account, BBVA has a competitive advantage against other banks.
Features of the account
An opening deposit of $25
$0 monthly maintenance charges
Fee-free withdrawals at 64,000 ATMs countrywide
Automatic ATM fee refunds for non-network transactions
Transaction alerts via BBVA mobile banking application
Get cash back for debit card purchases
7. Acorns Spend Online Checking Account
Many checking accounts come with a debit card. But the Acorns Spend Checking Account stands out because the debit card lets you invest, save, and earn interest. This Acorns account is engineered to ensure you’re saving automatically.
Features of the account
$0 monthly service costs
Mobile check deposit and sending
$0 overdraft charges
Free bank-to-bank funds transfer
A free debit card
Built-in bill pay
Digital direct deposit
Cost-free nationwide ATM access
No minimum balance requirements
Automatic savings and investing support
8. Navy Federal Credit Union
With over eight million members, NFCU is the largest credit union in the US. While they don’t use to qualify you for an account, membership is highly selective. You must be on active military duty, in the reserve military, a veteran, a contractor at DoD or an employee, or a family member of those who meet that criteria.
Features of this account
Cost-free daily checking
Fee-free checking on active duty
College checking for full-time learners between 14 and 24 years
9. Peoples Cash Solutions Checking Account
Consumers with a negative TeleCheck or ChexSystems report can re-establish a banking relationship with this bank. The account does not tell ChexSystems about fraudulent activity. And you don’t have to worry about bankruptcy or bad credit preventing you from getting a bank account. But there’s a minimum account deposit of $30 and another $4.95 in monthly service fees.
Features of this account
Personal checkbook for the account holder
Full online banking services
A Mastercard debit card
Free digital bill pay
Free paper-based monthly statements
10. TCF Bank
It’s a great option for those who want non-ChexSystems banks. TCF Bank boasts at least 436 locations, although it is limited to Illinois, Colorado, Indiana, South Dakota, Minnesota, Michigan, Wisconsin, and Arizona. The one drawback is that prospective customers with an EWS report may be turned down.
Features of the TCF Bank Checking Accounts
Free student checking
Comprehensive teen checking
Alternatives for Banks That Don’t Use ChexSystems
If banks that don’t use ChexSystems turn you down, there are a few other options to consider. However, some of these alternatives may restrict some checking features, such as not allowing you to write checks. But they are still worth trying.
1. Second Chance Checking Accounts
Banks create second chance checking accounts to cater to consumers with negative banking records. Although they are great when you want to rebuild your banking profile, many of these accounts charge a monthly fee. Besides, others will ask you to sign up for direct deposits. Overall, you’ll have fewer benefits than a regular checking account.
2. Foreign Checking Account
It is one of the least convenient alternatives to banks that don’t use ChexSystems. However, you can still explore this option, particularly if you are close to the Canadian border. Several banks in Canada allow US citizens to get a checking account.
Consider joining online services such as PayPal. You can get a debit card when signing up for some e-wallet services, although you must meet the specified criteria.
4. Secured Credit Cards
Got some funds for a security deposit? Use it for collateral towards your secured credit card. However, you should be ready for higher-than-average fees and interest rates. Furthermore, these credits come with smaller credit limits.
5. Money Market Accounts
All brokerages don’t use ChexSystems. Therefore, you can get a money market account if you are ineligible for a checking account. Be ready for substantial deposit and balance requirements with this option.
6. Prepaid Debit Cards
If you can’t qualify for banks that don’t use ChexSystems, this is your next best alternative. A prepaid debit card works similarly to a credit card. But the best part is that the charges are not as high as before. If you’re in luck, you can sign up for a card that offers free ATM withdrawals, online bill pay, and other features.
Why A No ChexSystems Bank is The Best Choice
Negative banking history can prevent you from getting a new checking account. That means doing without one. But it can be very tough to live your life all through without a bank account.
When you resign to going without a bank account, it might deny you several opportunities in life. Maybe you want to finance a new vehicle. You can’t apply for an auto loan without a bank account.
On the flip side, banks that don’t use ChexSystems can allow you to rebuild your banking history. Unlike other alternatives such as secured credit cards or money markets accounts, second chance checking accounts give you access to real banking systems despite poor banking records.
Having a non-ChexSystems checking account is vital even if you have another account with a ChexSystems bank. Credit unions and banks that rely on ChexSystems report run through existing customers’ accounts from time to time. They will freeze your account if it’s discovered to have a negative report.
It can be quite challenging if all your funds are in one bank account. You’ll be unable to access your money for up to thirty days. Therefore, an existing account with no negative record doesn’t provide immunity from ChexSystems.
What Is The Difference Between A No ChexSystems Bank Account And A Second Chance Bank Account?
Non-ChexSystems bank accounts and second chance bank account have several similarities. A significant dissimilarity is that second chance banks and credit unions may still run ChexSystems report. However, they’ll still give you a second chance despite your negative banking history.
Like banks that don’t use ChexSystems report, second chance bank accounts may require a low account balance or none. But unlike non-ChexSystems bank accounts, you’re likely to pay some monthly service fee with second chance checking accounts.
Moreover, the best second chance bank account will avail similar features and perks to ChexSystems credit unions and banks. Some of the common offerings include digital banking, bill pay, and overdraft protection. With both options, you can upgrade to a regular checking bank account with a positive banking record.
The best second chance checking accounts still have some of the same features and benefits as ChexSystems banks and credit unions, such as overdraft protection, online banking, and bill pay. With both accounts, you should also be able to upgrade to a standard checking account once you have a positive banking history.
Below is a quick comparison chart of banks that don’t use ChexSystems vs. second chance banks:
Banks that don’t use ChexSystems
Second chance banks
No checking ChexSystems report to open account
Run ChexSystems records to open an account.
Low balance requirements or none at all
Maintenance fees may apply.
May require monthly service fees.
May offer overdraft protection
May offer overdraft protection
Upgrade to a regular checking account after establishing trust
May limit services like online banking & bill pay
May impose more requirements like taking a personal finance class.
What Are My Options If I’m Listed in ChexSystems?
If you’re having difficulties opening a checking account because you’re listed in ChexSystems, there are few options you can explore. The first one is to try shopping for banks that don’t use ChexSystems. We’ve reviewed ten of the best non-ChexSystems banks and credit unions. But there are hundreds of choices in the marketplace.
Another option is to try finding a second chance bank that is willing to work with you. Note that they may still check your ChexSystems report, although they won’t reject your application based on those records. But they might impose additional requirements such as making you take a short course on personal finance.
Other alternatives include secured credit cards, money market accounts, e-wallet, foreign bank accounts, and prepaid debit cards. Of all these choices, prepaid debit cards make the best option. Depending on the card issuer, you may receive free ATM withdrawals, digital bill pay, and other features.
How do I get off of ChexSystems?
Like any other consumer reporting agency, ChexSystems must contain accurate information. ChexSystem’s governing body, the Fair Credit Reporting Agency, requires the former to address consumer disputes like other credit bureaus. It means you can dispute ChexSystems if they have inaccurate reports on you. It means getting your free annual ChexSystems report to check for errors.
And to avoid future problems with ChexSystems reports, consider these best practices:
Keep more than one bank account to have an alternative if one is closed.
Split direct deposits between two or more checking accounts depending on the amount so you can access funds when one of the bank accounts has issues.
Avoid additional features such as bill pay until you have a positive banking record.
Report any suspected fraudulent activity on your account to avoid the same reflecting on your ChexSystems report.
Continue monitoring your closed accounts for several months to make sure you don’t have outstanding overdrafts, fees, or charges.
Can You Dispute ChexSystems?
It’s possible to dispute ChexSystems along with the reporting bank if any inaccurate item in your records. Both the bank and ChexSystems must follow investigation requirements laid down in the Fair Credit Reporting Act. Should the item be found to be inaccurate after investigations, it must be removed from your records.
Here is a step-by-step guide to dispute ChexSystems if you notice errors:
Ask for your free ChexSystems report.
Examine the report to single out inaccurate details to dispute
Begin the dispute process. You can submit your dispute through the mail, by fax, or online. Download the ChexSystems dispute form from their website, fill it in, and send it by fax or mail together with supporting documents.
The agency has up to 30 days to look into your dispute. If the dispute is inaccurate, they’re obligated to expunge it from your report. Also, should the reporting bank fail to respond to your dispute, ChexSystems must clear the debt.
Pay for deletion of reported debts. If your record contains unpaid bank fees, consider paying that bank so they can clear the debt from your ChexSystems report. In most cases, consumers get to negotiate for a lower amount for older debts. If the bank doesn’t sanction a complete deletion, remember to confirm that ChexSystems has updated its record to paid status.
Frequently Asked Questions (FAQ)
Do all banks check ChexSystems?
More than 9,000 banks in the United States use the ChexSystems report when screening new account applicants, according to eFunds. That figure translates to at least 100,000 retail branches and nearly 80 percent of all banking institutions nationwide. However, numerous banks don’t reference the ChexSystems, TeleCheck, or EWS.
Does ChexSystems go on your credit?
No. ChexSystems is a specialized consumer reporting agency that solely deals with how you handle check-writing activities. Three independent consumer reporting agencies report on your credit records. You can check with Equifax, TransUnion, or Experian for credit-related activities.
Does Wells Fargo Check ChexSystems?
Yes. Wells Fargo checks ChexSystems. However, they offer second chance checking accounts for customers who can’t open a regular checking account. The Wells Fargo Clear Access Checking account is available for consumers in ChexSystems. It comes with a $25 minimum opening deposit and a monthly service fee of $10.
Does Bank of America use ChexSystems?
The Bank of America is one of the ChexSystems banks and credit unions that will deny you a checking account based on your ChexSystems report.
Does ChexSystems show up on background check?
ChexSystems will not show up on a background check unless it’s upon a bank’s request. Records in the ChexSystems’ database are confidential financial information that cannot be released to anyone unless they show cause. However, it may appear if the organization running the background check writes to them requesting the report.
Having a negative banking history should not stop you from operating a checking account. Several banks don’t use ChexSystems to qualify you for a bank account. Besides, these institutions provide the same features as ChexSystems banks. You will have a range of choices to match your banking needs, no matter your banking history.