How Do Chexsystems Consumer Reports Affect You?

When we talk about banking, the term chexsystems often gets tossed around, but who exactly is this company and how do consumer reports about you get impacted by this company? Overall, this is a company that provides deposit account verification services to banks and other financial institutions. They also provide assistance to banks by identifying account applicants who may have a history of mishandling checking accounts or other bank accounts.

Is ChexSystems A Credit Bureau?
The legal term for a credit bureau under the federal Fair Credit Reporting Act (FCRA) is consumer reporting agency, often abbreviated in the industry as CRA. There are three main nationwide CRAs in the United States; Equifax, Experian and Transunion. Chexsystems is also a consumer reporting agency (CRA) and specializes in data related to consumer bank accounts.

Do They Decide What Checking Accounts To Approve?
Chexsystems neither approves nor declines applications for bank accounts. The bank makes that decision based on a variety of information including data provided by this company. Essentially, each bank has a proprietary matrix for decision making on whether to open an account or not for an applicant. This process is no different than when you apply for a credit card or car loan. Credit bureaus like equifax do not make decisions about loan applications. They simply provide historical information and predictive repayment scores to help car dealers and department stores decide whether to offer you credit.

How Long Does My ChexSystems Information Stay On File?
Each report submitted stays on file for five years. The bank or other financial institution that submitted the report has the ability to request removal of the report before the five year period expires. Even if you pay back the bank what you owe, the bank is under no obligation to remove the accurate report which provides information about your mishandling of your bank account.

Can ChexSystems Data Be Disputed?
Yes. In fact, I have done this myself and been successful. Every dispute of inaccurate or incomplete information starts with submitting a simple form called consumer request for reinvestigation which is a consumer's right which is protected by law here in the United States.

So, now that you know how chexsystems consumer reports affect you, remember that even if you can't get approved for a checking account at a bank, you can still conduct your banking business with an alternative banking service. Common banking tasks like online bill payment, ATM access, debit cards and direct deposit can be performed with checkless bank services which are available to consumers interested in these types of financial services.