Did you know that mishandling a checking or savings account can negatively impact your report with Chex Systems?
It’s crucial to maintain a favorable score with this company. Around 80 percent of all banks and credit unions will review your report with Chex Systems anytime you decide to open a new checking or savings account.
This consumer credit agency is very different from Equifax, Transunion and Experian because the data it collects and supplies to over 9,000 financial institutions shows whether or not an applicant has a history of mishandling a checking or savings account.
You can get a negative report when your financial institution closes your account for “cause” and reports it to this agency. The reasons behind an account being closed for cause can vary from one bank to another, but some common ones include:
- Excessive bounced checks;
- Abuse of a debit card or ATM card;
- Unable to collect for an account overdraft;
- Multiple account overdrafts;
If a bank reports an incident to Chex Systems it stays on your report for five years. But just because you have an incident on file with Chex Systems does not automatically mean that you will be denied a checking account at every bank.
Some banks like Bank Atlanticwill allow you to open a bank account with only one incident. Other banks like Compass do not even pull a Chex Systems report but instead pull a Telecheck report.
Here are 10 ways to maintain a positive report with Chex Systems:
- Stop all automatic payments prior to closing a checking account. Keep in mind that some companies may take weeks to process your request so prepare for additional payments that could be deducted from your account.
- Close your account directly with your bank or credit union. Don’t allow maintenance fees or overdraft fees to accumulate causing a negative balance.
- Allow adequate time to pass when depositing checks prior to writing checks against the balance.
- Always balance your checkbook and avoid overdrafts at all costs. You can easily avoid this by adding overdraft protection to your account.
- Be careful with having a joint account because regardless of which person mishandles the account both account holders are responsible.
- Protect your bank debit card and Personal Identification Number (PIN) at all costs. Allowing someone else to access your funds opens your account to potential abuse.
- Avoid post-dating a check because it can still be cashed early. If you bounce checks and cause excessive overdrafts then your account may end up getting closed.
- Review your bank statements regularly. If you uncover any additional fees or unauthorized charges notify your bank immediately.
- Always notify your bank when you change your address. It may take time for your next statement to arrive so sign up for online banking if it’s available.
- Report lost or stolen checks to your bank immediately. Do everything you can to protect yourself from check fraud including shredding old checks, reconciling bank statements, and keeping statements secure.
If you have been denied an account from a bank or credit union, and they used Chex Systems to make their decision, then you are entitled to a free ChexSystems Consumer Report.
Under the Fair and Accurate Credit Transaction Act (FACTA), you are also able to receive a free copy of your Chex Systems Consumer Report at your request, once every year.
If you believe that any of the information in your report is incorrect or incomplete you can file a dispute with Chex Systems and expect a response within 30 days.
Take these 10 steps to avoid incidents like bounced checks and overdrafts so you can maintain a positive report with agencies like Chex Systems.
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’. You can also find Marco on Google+.