Chexsystem – How to Avoid Them and Get Back on Track!

We’ve all been there: An unexpected bill, car repair or maybe you just didn’t realize that something had already left your bank account. It doesn’t take much to end up with NSF fees stacking up in your account! With almost half of today’s workforce struggling to live paycheck to paycheck, it is a situation that has become all too common. In fact according to a study by Bretton Woods Inc. the average family with a checking account in the US today pays out over $360 per year just in NSF fees. While you may be worried that all those fees may leave you with an empty account, or worse bad credit, there is in fact something much more unfavorable that could happen: Chexsystems.

In theory the Chexsystems idea is sound. Keeping track of people who owe money to banks preventing them from committing fraud makes sense. But unlike a credit reporting agency they do not keep track of the good and the bad, only the bad.  You could have been a customer with the same bank  for 30 or 40 years with an excellent credit rating, but one mistake could get your account closed and your name  blacklisted preventing you from opening another account for the full five years Chexsystems keeps your file. With over 80% of US banks and credit unions using Chexsystems it’s getting much harder to get a bad credit bank account or ’second chance checking account’.

If that’s the situation in which you find yourself, do not despair, all is not lost! There are ways of getting around a bad Chexsystems report.  Now I’m not advising you to run out and commit fraud, but for many why should one simple mistake deny you the chance for a checking account?  There are couple of options open to you: First you have to ask the question, ‘Do I really need a checking account?’ If you need someplace to deposit your paycheck and pay bills there are plenty of companies out there offering pre-paid debit/credit cards. Your paycheck is deposited straight to the card, which you then use to pay bills. Although if you do want to have your own account there are a few banks out there which do offer second chance checking accounts.

At the time of this article RBC Centura opens new accounts based solely on your Equifax score and do not consult Chexsystems. USAA and Carolina First Bank use Chexsystems but are willing to forgive one or two bad marks. Frost National Bank and Bank of America will allow you to open a new checking account so long as you can provide them with a letter from your former bank saying that the debt owed has been paid in full. (Be aware bank policies do change, so please check with your local branch.)

You may want to consider alternative bank accounts such as the Second Chance Bank Account which will guarantee you a checking account if your name is in chexsystems.

So whatever your situation, there is hope: A second chance checking account or pre-paid cards can help you start to rebuild your credit rating today and give you hope for a brighter tomorrow.

Tags: bad credit, banking help, banks, checking acount, chexsystems, personal finance