There are very few of us out there who haven’t made a mistake or two with our checking accounts. Typically, these errors result in overdraft fees, payment on the account and we move forward.

Normally, when a consumer fails to pay a bill, their name and the amount they owe is turned over to one of the major credit reporting agencies. This system works well for consumers’ credit accounts, such as mortgages and auto loans, but doesn’t translate well to non-credit accounts, such as checking or savings accounts held with a typical bank. This is where ChexSystems comes in.

Who is ChexSystems?

Chex Systems, Inc. provides account verification services to financial institutions such banks and credit unions, to aid them in identifying account applicants who may have a history of account mishandling (i.e. excessive overdrafts, fraud, debts owed, etc.)

Is ChexSystems a credit bureau?

Chex Systems, Inc. is a consumer-reporting agency governed by the federal Fair Credit Reporting Act (FCRA) and other laws. Like a credit bureau, ChexSystems uses your social security number to track how you manage your accounts, how frequently you overdraw your accounts and whether you owe money for overdrafts or bed checks.

How long does the report stay on file? 

Each report submitted to ChexSystems remains on our files for five years, unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law.

My account was paid. Why wasn’t the report removed? 

Under the FRCA, both the CRA and the information provider (such as the institution responsible for submitting a ChexSystems report) are responsible for correcting inaccurate or incomplete information documented in a consumer’s report.

Can I get out of ChexSystems?

Yes, and I can help.  If you are having an issue with ChexSystems call or e-mail me today.

Until next month, 

Erik Kaplan
THD Credit Consulting
(800) 822-7120

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