Most consumers know about the three credit reporting agencies. They understand that if they don’t have a good FICO score which is a score that measures credit worthiness, they will not get low interest rates and it may even keep them from getting a job.
While Experian, Trans Union, and Equifax are well known, if you ask most people about Chexsystems, they have never heard of it. They may have seen the signs in the bank but never asked or understood what it was.
Wouldn’t it be odd if you could bounce checks or have unpaid bank fees yet they don’t appear on your credit report? While it is true that you will not see these items on your credit report, they will appear on your Chexsystems report.
Chexsystems is very similar to the credit reporting agencies. If you mishandle your checking or savings account with unpaid fees, bounced checks or some other violation of the terms of service, banks send this information to Chexsystems. Information will stay in your file for 5 years and you have a right to view a free copy of your report once every 12 months. Finally, you also have a right to dispute your report by contacting Chexsystems directly
If you have negative entries in your Chexsystems report, what implications does this have for you? If you go to a bank to open a checking or savings account, a bank may deny your application. The bank could also use this information in conjunction with your credit report to make judgments on making loans to you. Like credit cards, it’s important that you keep your bank accounts in good standing to avoid negative reports to Chexsystems.
What should you do if you have a negative chexsystems report? The first step is obvious. You have to take care of the debt. If you owe money, pay it. Nothing else will happen until that happens. Often they will negotiate with you if you are willing to pay a lump sum. If you can’t do that, get your debt paid as quickly as possible.
Once it is paid, the bank is required to notify Chexsystems that the debt has been satisfied. That doesn’t remove the entry from your report but it does indicate that you have paid your debt. Sometimes, in exchange for taking care of the debt in a lump sum or by using something as a bargaining tool, you can ask the bank to have the entry removed from your report.
If you have always kept your bank accounts in good standing, you most likely have nothing to worry about with your Chexsystems report. You should, however, order an annual copy to check for errors. Don’t wait until you are turned down for a bank account to discover that there are errors. Any disputes won’t be corrected overnight so order your report today.