Are you looking for ways to get your credit score back on track? If so, you’ve probably come across ChexSystems. This check verification service is owned by eFunds, a division of Fidelity National Information Services. It reports information on consumer deposit accounts. If you’ve received a negative report, there are steps you can take to dispute it. Below, we’ve outlined some of the main reasons why a negative report can affect your score.
Reports are sent to financial institutions
A ChexSystems report can help you better understand your financial situation, revealing any suspicious or fraudulent activity. If you find any items on your report that don’t appear to be from you or that seem too good to be true, you may be a victim of identity theft. To prevent new accounts from being opened in your name, you should freeze your ChexSystems account. To freeze your ChexSystems account, you must provide your personal identification number.
ChexSystems is a database of negative accounts and other financial history. Banks check ChexSystems reports to make sure their customers don’t have negative accounts. This includes overdrawn and negative balance accounts as well as closed accounts. Negative marks remain on your report for about five years. Financial institutions use ChexSystems reports to assess their risk before doing business with you. They want to make sure that the account holders will keep their accounts up to date.
Reported information stays in the database for five years
You can challenge ChexSystems’ decision to keep your reported information for five years by requesting that they remove your report. This request must be made by you or by the reporting bank. Some banks remove your reported information when you reach a settlement agreement with them, but most just report that you repaid the debt. However, if the bank is reporting that you have defaulted on a debt, you will need to make the payment as soon as possible.
You can request that negative information be removed from your report if you can provide acceptable proof. Acceptable proof is a canceled check or original banking contract. If you cannot provide acceptable proof, you can ask ChexSystems to remove the relevant information. If the bank does not agree to remove the information, you may want to find another bank. In such a case, you can contact the National Consumer Law Center for help.
Impact on your credit score
A second-chance checking account may be the best option for you if you’re concerned about the impact of ChexSystems on your credit score. These accounts are geared toward consumers with poor banking histories. However, they usually have higher fees and fewer services than regular checking accounts. However, you may be able to get approved for one with limited restrictions and a fee. Another option is a prepaid debit card. Although they come with a monthly fee, these cards can help you rebuild your banking history.
Closing a bank account won’t damage your FICO score, but it may affect your bank account. This happens when your bank account is closed “with cause,” which means it was closed for overdrawing. This information is reported to ChexSystem and will remain there for five years. Many banks use ChexSystem as part of their initial screening process and may not open a checking account for you if you have a low QualiFile score.
Steps to dispute a negative report
If you’re looking to dispute a negative report on your ChexSystems report, you have several options. You can dispute the information online or through certified mail. Make sure to request a return receipt so you can prove when you sent your letter. The Fair Credit Reporting Act requires that the company verify your negative report within 30 days. In most cases, you can file a lawsuit in a federal court if you believe it’s incorrect.
Generally, negative information will stay on your ChexSystems report for up to five years, but there is a process to have it removed. If you’re denied a bank account, the most likely reason is that you have an outstanding debt with a previous bank. This debt is usually a result of unpaid bank fees. Once you’ve paid off the debt, you can dispute the false information that’s causing the report to remain on your ChexSystems report.
Second-chance bank accounts available if you’re on ChexSystems
If you have a negative financial history, you may find it difficult to open a traditional bank account. Overdrafts, late payment postings, and holding onto checks for months may all be contributing factors. However, you don’t have to give up hope. There are second-chance bank accounts available for people on ChexSystems. These accounts require diligence and good behavior and can lead to regular account upgrade.
These second-chance bank accounts offer consumers the chance to start anew with their banking history. Second-chance accounts don’t require a large minimum balance, and some don’t even check your ChexSystems history. These accounts are an opportunity to establish a positive history with the ChexSystems, a database which records consumer bank records. These records are not permanent, and negative records may take five years to disappear.
