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ChexSystems is a bank reporting agency that tracks issues like returned or bounced checks, overdrafts, unpaid balances, and identity theft. So if you’ve ever had issues like these, you may have a ChexSystems report.
While this won’t affect your credit score, it can make opening a new bank account more difficult.
But what if you feel there’s incomplete or inaccurate information on your ChexSystems report and a negative item has been wrongfully added?
Can You Dispute ChexSystems?
Yes, the Fair Credit Reporting Act allows consumers to make disputes.
“If you dispute the completeness or accuracy of the information in your consumer file, you have the right to submit a dispute directly to the source of the information,” ChexSystems explains.
If you have a ChexSystems report but feel there’s an inaccuracy, you have the right to dispute it.
Note that once you have a ChexSystems consumer score, it can last for up to five years. And you may not even know you have negative information on your ChexSystems report until your application to open a new bank account is denied.
Once you realize there’s a problem, you’ll want to get it sorted out, especially if you plan on opening a new checking account or savings account anytime soon.
Because it can lower your odds of eligibility, it’s important to do everything within your power to remove yourself from ChexSystems as quickly as possible.
This brings us to our next point.
How Can I Remove Myself from ChexSystems?
There are four key steps to take to make a ChexSystems dispute and clear your record.
Get a Copy of Your Report
You can get a free copy of your ChexSystems report along with your ChexSystems score once per year. Note that this doesn’t affect your credit score.
“If you have been denied an account and ChexSystems was used in the decision process, you can request your consumer disclosure report to help you understand what led to this decision,” the agency writes.
You can request a free report here.
Simply fill out the information including your name, current address, previous address, and so on, and submit.
You can find a free sample report here for more info.
Dispute Errors on Your Report
Once you’ve identified the information you believe to be inaccurate or incomplete, you’ll need to dispute those specific issues.
There are two ways to go about this.
One is to submit a dispute directly to ChexSystems, which can be done online, through fax, through the mail, or over the phone.
The other is to submit a dispute to the source of the information (the financial institution responsible for the issue).
If you want to do it online (which we recommend for simplicity), you can submit a dispute here.
It’s pretty straightforward. Agree to the terms and conditions, verify your age, personal details, contact information, and so on.
Below that you’ll need to list the specific dispute(s) you want to make (you can submit up to 50).
You’ll also want to upload any documents that can help prove an error was made.
Once that’s completed, you can officially go about disputing ChexSystems.
If you want to submit your dispute by fax, the number is 602.659.2197.
By mail, the address is:
Chex Systems, Inc.
Attn: Consumer Relations
P.O. Box 583399
Minneapolis, MN 55458
And by phone, the number is 800.428.9623.
From there, ChexSystems will review your dispute and notify the financial institution of the information within five days.
Then, the financial institution will review your dispute and report the results to ChexSystems.
The whole process is typically completed within 30 days (21 days for Maine residents), and you’ll receive the results through the mail.
You can find a complete guide to the process here.
Pay Off Debt
Considering that issues like unpaid balances, overdrafts, and identity theft are common reasons for receiving a ChexSystems report, paying off debt is critical for getting back on track.
While this, admittedly, is often easier said than done, especially if you have significant debt, it should be a top priority.
Not only can this help you clear up your ChexSystems report, it can also improve your credit score.
I also suggest reading this post we wrote about good debt vs. bad debt to improve your overall financial literacy.
Ask Creditors to Remove the Information
As we mentioned earlier, the most direct way to make a ChexSystems dispute is to go through ChexSystems.
However, you can also submit a dispute to the source of the information—the financial institution.
If you believe a mistake has been made, you can contact the financial institution directly to ask them to remove the issue and update your ChexSystems report.
You can start by contacting them through phone, email, or a website contact box and then send a formal dispute letter. And you can find a sample dispute letter here.
Once the report has been updated, you’ll want to get a new copy and keep it for your records in case of any future disputes.
Take Legal Action if Errors Aren’t Rectified
Say you’re certain there was incomplete or inaccurate information on your ChexSystems report and you sent a dispute letter, but the situation wasn’t resolved. What do you do?
In that case, you’ll want to contact a legal professional.
Again, the Fair Credit Reporting Act gives consumers the right to dispute any items they feel were made in error. And if the issue isn’t cleared up as you feel it should be, an attorney can help you take the next steps to clear up your ChexSystems report.
Besides that, we suggest notifying the Consumer Financial Protection Bureau. They will allow you to submit a complaint and you should receive a response within 15 days.
What Can You Dispute?
Under the Fair Credit Reporting Act, you have “the right to dispute any items on your ChexSystems report you feel may be inaccurate, untimely, misleading, biased, incomplete, or unverifiable (‘questionable’),” Checking Expert explains.
This can include many issues, including the ones we mentioned previously like:
- A bounced check
- A returned check
- Unpaid balance
- Identity theft
But it can also include:
- Involuntary account closure
- Account abuse
- ATM abuse
- The number of accounts recently applied for
So if the issue you’re experiencing falls under any of these categories, you should be able to dispute it.
Again, ChexSystems allows you to make up to 50 disputes per session.
So if there are multiple issues, you can conveniently include everything while filling out the form so you don’t have to complete the process multiple times.
How Long Does it Take to Get Out of ChexSystems?
Without removing an issue, it will typically remain on your ChexSystems report for five years before it falls off on its own.
But if you make a successful dispute, the investigation should be completed within 30 days (21 days for Maine residents).
If, however, you submit additional information or documentation after making the initial dispute, this can take up to 15 extra days to review.
Once that period has ended and the issue is resolved, the negative item should be removed from your report within a few days.
So, from start to finish, you should be able to get out of ChexSystems within a maximum of 45 days, assuming you don’t submit additional information.
But if you do submit additional information, it may be closer to two months.
The bottom line is that it’s much better to make a ChexSystems dispute because you’ll be removed much earlier than simply leaving it alone.
To quantify, you’re talking about about a month and a half versus five years.
How Do You Get a Checking Account if You Are on ChexSystems?
Let’s say that for whatever reason you can’t get off ChexSystems, but you want to open a new bank account. What should you do?
Your best option is to apply with either a non-ChexSystems bank or a bank or credit union that offers second chance banking.
The former banks and credit unions won’t look at ChexSystems at all when determining eligibility.
The latter bank and credit union may look at your ChexSystems report when determining eligibility, but most are willing to overlook issues and give you a “second chance.” Many will even overlook bankruptcy.
Here are three particular banks and credit unions we recommend for opening a new bank account when you’re still on ChexSystems.
There are a few reasons why we like Chime.
They allow you to open a new bank account quickly and easily by filling out some basic information.
They’re lenient with their eligibility requirements for becoming a new account holder, and there’s no overdraft fee for up to $200 on your deposit account.
There’s also no monthly fee, no foreign transaction fees, no minimum balance, and you can withdraw money from over 60,000 ATMs without fees as well.
You can even sign up for direct deposit to get your paycheck up to two days early.
Besides that, Chime is perfect for credit repair, which makes them a good option if you’ve ever dealt with bankruptcy and want to improve your credit report.
So if you want to bypass a ChexSystem report or any other type of consumer reporting agency and be able to get a credit card or debit card without a lot of hassle, Chime is a great way to go.
NorthOne is a bank that’s specifically designed for businesses, including small businesses, startups, and freelancers.
They place a strong emphasis on digital banking where they make it simple to manage your checking account electronically and offer free deposits and withdrawals.
We like NorthOne because it easily connects with countless business apps like PayPal, Stripe, Square, and Venmo for streamlined payments, while also helping you with managing taxes, payroll, and other business expenses.
Getting set up with NorthOne is easy, and they offer reasonable, transparent pricing at just $10 per month.
With it, there are no hidden fees and you can always cancel at any time.
And they can be a huge help for improving your credit report in time.
Finally, there’s Sable, a bank that offers what some consider to be the best credit card without having to deal with ChexSystems.
Sable has some major benefits, including:
- No hidden fees
- No credit checks
- Access to a secured credit card and bank account in just five minutes
- 2% unlimited cash back on many major brands
Something else worth noting is that Sable caters heavily to U.S. immigrants, and they don’t even require a social security number. All you need is a U.S. address, passport, and visa to apply.
And because Sable relays data points to a credit reporting agency quicker than most other banks or credit unions, it’s great for building your consumer report and consumer score in a hurry.
We also like that Sable allows you to keep growing your credit limit over time.
Even if you’ve dealt with something serious like bankruptcy, you can use Sable as a springboard to get your credit back on track.
As you consistently make your payments on time, you can make bigger purchases, which is helpful for continually building your credit report.
You can get signed up with Sable here to get a new bank account and debit card.
- Can I Open A Bank Account If I Owe Another Bank Money?
- Banks That Don’t Use ChexSystems
- Free Online Checking Account: No Opening Deposit, No Credit Check
- ChexSystems Removal: A Step-by-Step Guide
- How to Get Your ChexSystems Report Online
- 12 Second Chance Bank Accounts
Nick is an author, small business owner, and finance/digital marketing writer. He’s been covering the industry for over a decade and loves exploring topics to help other small businesses succeed. You can connect with him at Nickmannwrites.com.