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Do credit unions use ChexSystems?

It's common for credit unions and banks to use ChexSystems to determine the level of risk associated with offering an individual a checking or savings account. However, not all credit unions and banks use ChexSystems. If you have been denied an account or are concerned that you may be denied a credit union account due to your financial history, you are entitled to a free copy of your ChexSystems report. Start by contacting the credit union you would like to join and ask if they use ChexSystems.
 
Read on to learn more about credit unions using ChexSystems.
 
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our mortgages, home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs.

What is the ChexSystems report?

ChexSystems® is a national consumer-reporting agency under the Fair Credit Reporting Act (FCRA) that compiles and maintains files on problems that consumers may have had with checking and savings accounts. This includes:
1) Medical records or payments
2) Residential or tenant history
3) Check writing history
4) Employment history
5) Insurance claims
 
This consumer information is shared with ChexSystems by their client companies and retained by ChexSystems. Any individual that has had a checking account or financial history in the above categories likely has a ChexSystems file. This information is stored in a report that's unique to each consumer, which may be shared with credit unions, financial institutions, and other types of companies.
 
When an individual applies to open a checking or savings account, their ChexSystems file is reviewed by the credit union or bank.

If your ChexSystems report shows you have bounced checks or have large unpaid debts such as medical bills, you may be denied an account.
 
What can ChexSystems share with my credit union?
ChexSystems collects information regarding applications for new checking accounts, checking account openings or closings, and check-writing history (including bounced or returned checks). This information, along with a "risk score,” is provided to credit unions and banks every time you apply for a new account.
 
As such, ChexSystems will typically share the following information with your credit union:
 
ChexSystems Consumer Score.
Your ChexSystems Consumer Score is based on information contained in your consumer file. By reviewing the key factors that impact your score, you can gain a better understanding of your score.
Request your ChexSystems® Consumer Score.
 
ChexSystems Consumer Disclosure.
Under the FCRA, you are entitled to a free copy of your consumer disclosure report, upon your request, at a minimum once every 12 months and more frequently under certain conditions.
Request your Consumer Disclosure Report.
 
Why do credit unions use ChexSystems?
Credit unions use ChexSystems reports as a risk-assessment tool to evaluate an individual's banking habits—such as bank account closures, bounced checks, check writing history, and other bank-related activity — that could have a negative impact on the credit union. It's important to note that ChexSystems neither approves nor declines applications or accounts. Each credit union determine whether the account applicant is high risk based on that particular financial institution's policies.
 
How to clear up your ChexSystems report
If you are turned down when trying to open a bank account because of ChexSystems, there are actions you can take to resolve issues. Start by requesting your ChexSystems Report and ChexSystems Consumer Disclosure, as discussed earlier in this article.

1. Get a copy of your report. Under the FCRA, you are entitled to a free copy of your consumer disclosure report, upon your request, at a minimum once every 12 months and more frequently under certain conditions.
   Request your Consumer Disclosure Report.

2. Dispute errors. Request your report and score and examine your records for errors. If you find errors, you may dispute them with ChexSystems and the financial institution that reported the information.

3. Pay off debts. If you owe money to a financial institution, the easiest way to clear your report is to pay off the debt.

4. Ask creditors to update information. Once you have paid off any debts that have negatively affected your score, you have the right to ask the creditor to update your file showing you've paid the debt. When ChexSystems receives an account status update from the source of the information, the report will be updated, but the record will remain on file.

5. File a complaint. If you pay off your debts and the creditor refuses to update your file or you encounter a problem in spite of your good-faith attempt to correct an error on your report, you may file a complaint with the Consumer Financial Protection Bureau. 

How long do you stay in ChexSystems?
ChexSystems retains records of reported information for a period of five years from the report date unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law or policy.
 
Is it possible to get a bank account if you're on ChexSystems?
Yes, it is possible to open a bank account if you're on ChexSystems, even if you have been denied an account before. Not all credit unions and banks use ChexSystems as a resource with which to measure consumer risk. You may call several credit unions and banks to find one that doesn’t use ChexSystems. Another option is to discuss your banking history with the bank representative. It is possible that although you are in ChexSystems the information won't count against you if you were a victim of identity theft or banking fraud.
 
If you are declined a traditional checking account, consider opening a "second chance" bank account, provided by some credit unions and banks to provide people with a new opportunity to improve their banking habits.
 
Here are several more ways to open a banking account with a bad ChexSystems report.
 
What's a good ChexSystems score?
ChexSystems Consumer Scores range from 100 to 899, with a higher score indicating a lower risk.
 
How often can I get a copy of my ChexSystems report?
Under the FCRA, you are entitled to a free copy of your consumer disclosure report, at your request, once every 12 months. ChexSystems provides all consumer disclosure reports and consumer score reports free of charge.
 
Will the ChexSystems report include my credit score?
No, the platform doesn't include credit bureau scores, nor does it include education level, Employment history, open/active account information, Rental history, or voluntarily closed accounts with no history of mishandling.

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For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
 
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