Checking Accounts - No Chexsystems Involved

Checking Accounts - No Chexsystems Involved

You may have recently had one or more banks reject your application for a new checking account. And, you may know by now the reason for your application having been rejected: it's called Chex Systems. Chex Systems has become a dirty word for anybody who has been rejected for a new checking account.

What Chex Systems Is

Chex Systems is a database that works like an early-alert credit risk system for banks and other financial institutions. Unlike the FICO (credit) scoring system we have all come to know (and love?) over the past several decades, the Chex Systems database does not feature a score. Rather, just having your name entered into the database is enough to get your checking account application rejected, no questions asked. Talk about lack of a chance to explain yourself!

How Your Name Got Reported To Chex Systems

Your name could have gotten report to this "banking risk assessment database" for all sorts of reasons, including for example:

1. You have shown yourself to be a banking risk in the past.

2. You have been suspected of writing bad checks and/or committing other types of check fraud.

3. You still owe one of your previous banks money for an overdraft they covered on your behalf.

As you can see from this list of possible reasons, notably it is NOT the case that having a poor FICO, or credit, score would have had an influence on your name showing up in this database. These are actually two very separate risk assessment systems with no direct crossover or influence. So, you can put to bed your fears about your poor credit score having an effect on your account getting rejected.

Your New Best Friend: How Second Chance Checking Can Save The Day

If you keep getting rejected for a new account, your new best friend in the banking world just may be any bank that offers second chance checking. A second chance checking bank is simply any bank that promises not to refer to Chex Systems when reviewing checking account applications. In fact, they ignore it altogether.

If you are looking for checking accounts with no Chexsystems involved, here are 5 things you should know:

1. You need make a list of second chance checking banks. They will usually bill themselves as "second chance banking." And, some may call themselves "non-Chexsystems banks."

2. Choose one that has ATM machines installed all over the country - or at least in the states in which you travel.

3. Make sure they are insured by the FDIC.

4. Get a feel for the bank - make sure you like "who they are" - before making your decision.

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