ChexSystems Explained

What is ChexSystems?

ChexSystems is a consumer credit reporting agency, similar to Experian and TransUnion, that focuses specifically on deposit accounts. Whenever you open a new checking or savings account, the bank will run your information through ChexSystems to see if you're a good customer.

Unlike your credit score that reports data points like payment history and average age of accounts, the ChexSystem does not capture positive data. 

ChexSystems "Negative Data Points"

  1. Check overdrafts
  2. Fraudulent check deposits
  3. Unsatisfactory balances
  4. Suspicious behavior (i.e., structuring)

Negative marks usually last for a period of five years, before falling off the ChexSystems report.

Structuring is when you modify your deposits and transactions are under $10,000. For example, if you were to deposit $9,000 in one day, and deposit another $2,000 after a few days, this would qualify as suspicious behavior. On a side note, structuring is illegal and can result in fines and jail time. 

How to Obtain Your ChexSystems Report

Since ChexSystems is legally considered a consumer credit reporting agency, they are required by FACTA to give consumers free access to their report once every twelve months. You can obtain a copy of your report online, by mail, or by phone. 

Online

Request your ChexSystems Report under the "Reports" section and click "Consumer Score": https://www.consumerdebit.com/consumerinfo/us/en/chexsystems/report/index.htm

By Phone

Call 1800-428-9623

By Mail

Print and complete this order form. Then send it to the following address:

Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125

Negative Marks and Disputing Information

Even if you have one derogatory mark on your ChexSystems report, it would be difficult to open a bank account with the respective bank if they use ChexSystems. 

To avoid negative marks on your ChexSystems report, do not close your account if you have any unsatisfactory balances. The best advice is to settle all your balances and make sure your account is in good standing before closing it. 

If you do notice any suspicious marks on your ChexSystems report, you can dispute it. This only works if it's a data point that's not valid. For valid issues, you would have to settle the issue directly with the bank for them to remove it off the report. In many cases, this means paying off your balance or any fees associated with the account. 

Learn more about disputing information on ChexSystems here: https://www.chexsystems.com/web/chexsystems/consumerdebit/page/dispute/

For example, if you closed an account that had a negative $100 balance, you would most likely need to pay the $100 to the bank and have them report it to ChexSystems. 

The final thing to be aware of is that even if you have a perfect ChexSystems report, some banks will deny you from opening an account if you have too many hard inquiries. Depending on the bank, a "high number" can mean between 6-12 inquiries.