ChexSystems Removal: A Step-by-Step Guide

ChexSystems Removal

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ChexSystems is a consumer reporting agency that documents your banking history, like a credit bureau for checking and savings accounts. Removing negative items from your ChexSystems report can improve your chances of qualifying for a new bank account.

Here’s what you should know about the ChexSystems removal process, including the primary steps involved and some alternative solutions if you’re unsuccessful.

How To Remove Negative Items From ChexSystems

Like Experian, Equifax, and TransUnion, ChexSystems must follow the Fair Credit Reporting Act (FCRA) requirements. That includes providing a structured system for consumers to access their reports and dispute any errors they find.

However, ChexSystems isn’t a credit reporting agency. Negative entries in your report may stop you from getting a savings account at ChexSystems banks, but they can’t contribute to a bad credit score or prevent you from getting a credit card.

That said, ChexSystems removal is similar to credit repair and just as important. Here’s a step-by-step guide to the process.

Step 1: Get Your Latest ChexSystems Report

Your FCRA rights include access to a free copy of your ChexSystems report every 12 months. ChexSystems must also offer you an additional free copy if a bank or credit union has denied your request for banking services within the last 60 days.

In your consumer report, you’ll find any details ChexSystems has gathered on you. In addition to your basic identification information, it may include a list of items like the following:

  • Previous account abuse 
  • Involuntarily closed bank accounts
  • Unpaid bank balances
  • Overdrafts and bounced checks
  • Suspected fraud or identity theft
  • Recent account applications

The easiest way to get your ChexSystems report is by filling out their consumer disclosure form online. While you’re at it, you can request your ChexSystems Consumer Score for further insight into your standing.

All you’ll need to do is verify your identity by providing your name, address, and Social Security Number. If you’d prefer more traditional methods, see ChexSystems’ alternative consumer request options.

Step 2: Dispute Any Inaccurate Information

Once you receive your ChexSystems report, review it for any inaccurate information. If you find anything you disagree with, submit a dispute with ChexSystems to have it removed.

Even errors that might seem relatively harmless are worth disputing. For example, a mistaken Social Security Number could cause someone else’s negative information to end up in your report.

Once again, the easiest way to submit your dispute is through the ChexSystems website, but you can also do so via mail, fax, or telephone. If you want to send a physical dispute letter, use certified mail to be safe.

Provide the name of the company that reported the disputed information and the date of the incident. If you find multiple errors, you must make a separate submission for each one.

Once you file your dispute, the FCRA requires ChexSystems to look into it, which they usually do within 30 days. However, they may extend that by up to 15 days if you submit additional information during the investigation.

Step 3: Settle Any Outstanding Bank Debts

You can only submit a ChexSystems dispute for information that you believe is inaccurate. Generally, requesting the removal of an entry that rightfully belongs in your report won’t help you.

However, you can remove outstanding negative balances from your report by paying them off, which may improve your chances of qualifying for banking services.

For example, if your old bank account was closed after you accrued too many overdraft fees, pay them. If you can’t afford to, reach out to the financial institution or their collection agency and negotiate a payment plan or lower amount.

Step 4: Request a Report Update

Once you’ve satisfied the outstanding debts in your ChexSystems report, ask your creditor for an official receipt. Keep a copy for your records to protect yourself if there’s ever debate over the issue.

Finally, ask the institution that owned your old banking debt to update your ChexSystems report. Alternatively, you can send the documentation to ChexSystems and ask them to remove the entry yourself.

Whichever option you choose, consider ordering an updated copy of your ChexSystems report afterward to confirm that the reporting agency made your requested changes.

Other Legal Options Available

If you can’t remove all the negative items from your ChexSystems report by disputing them or settling them, there are still a few other ways to reach your goals.

First, you can apply for a new account with a non-ChexSystems bank. Not every financial institution checks their database when reviewing applications for deposit accounts.

Alternatively, consider using second-chance checking accounts. Some institutions offer them to help bank account applicants with problematic histories.

They provide many of the same services as a traditional checking account, but there are some drawbacks, such as high, unavoidable monthly fees or direct deposit requirements.

As a last resort, consider a prepaid debit card. These don’t provide all of the services bank accounts do, but they can help you avoid holding onto cash and using it for every transaction.

Whichever account you pursue, shop for the best deal and read the terms and conditions closely. You want to avoid incurring fees you can’t pay and adding more entries to your ChexSystems report.

Finally, if ChexSystems mishandled your case by ignoring your dispute request or continuing to report inaccurate information, you can consider taking legal action.

Consumer protection attorneys may be willing to take on your case. Visit the National Consumer Law Center for assistance.

It may also be worth filing an official complaint with the Consumer Financial Protection Bureau (CFPB) or your state attorney general. Fortunately, you probably won’t need to escalate the dispute to such a degree.

How Long Does It Take To Get Out of ChexSystems?

If your ChexSystems removal attempts fail, you’ll have no choice but to wait for the negative information to drop off your account.

While the credit bureaus keep most negative information in your credit report for seven years, the ChexSystems database generally lets items disappear after just five years.

In the meantime, work on your financial foundation and avoid any problems that might prolong your inability to qualify for banking services. Keep a budget, build an emergency fund, and use any open bank accounts or prepaid debit cards wisely.

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