If you’ve had the misfortune of having a checking account closed due to being overdrawn for an extended period of time, then you probably know how difficult it can be to open future accounts at other financial institutions. Banks and credit unions use a special consumer reporting agency, Chex Systems, in order to protect themselves and other financial institutions from potential fraudulent activity. Anything dealing with bounced checks and overdrawn accounts that have gone unpaid for a number of days are reported to this agency.
Most people who have been reported to Chex Systems are honest, hardworking individuals, like yourself, and not the criminal that they are perceived to be. No one is perfect and anyone can bounce an occasional check if they forget to account for it or a spouse spends money without informing his or her other half. When a check does happen to bounce, most people are able to quickly pay back the bank in a reasonable amount of time. Regrettably, a few people are unable to pay back the full amount in the allotted time, due to lack of finances, and therefore, the bank closes the account.
Even though it may seem like you’ve been blacklisted and can never open another bank account, this isn’t true. Your name will stay in Chex Systems for five years and then you’ll be able to open a checking account at any bank you wish. This may not seem like a good thing, but fortunately, you don’t have to wait the full five years to open a new checking account-in fact, you can open one immediately.
A majority of banks use Chex Systems to ensure that there are no reports on you prior to opening a new account. Imagine the humiliation of going into a bank and being denied a bank account because they’ve pulled up some negative information from Chex Systems. Even if you have paid off the bank or financial institution in-full, most banks will still refuse you a new account. You don’t have to be treated like some white-collar criminal just because of a stroke of bad luck. You just need to do a little research before you decide where to open a new checking account. You can totally avoid any type of embarrassment by simply choosing the correct credit union or bank.
Luckily, there are banks and credit unions that don’t use Chex Systems at all when verifying new accounts. Some use Telecheck, an agency similar to Chex Systems that keeps records of any unpaid checks that consumers may have. Other banks and credit unions use neither credit reporting system and simply checks credit reports. This can be good or bad, depending on your credit rating. Some banks and credit unions will allow you to open an account as long as you can provide proof that the debt to the bank in question has been paid in-full. A few financial institutions will even allow you to open a checking account without any type of verification system, providing you don’t owe that particular bank money.
Some banks offer a “second chance” checking account, which is a regular checking account, but without the privilege of writing checks. You can use the account just like a standard checking account, and you’ll even receive a debit card, but there will be no automatic payments for transactions whenever funds aren’t available, which eliminates fees and penalties by the bank. Usually you’re required to have your payroll check directly deposited into the special account. Some financial institutions that offer this type of account will usually grant you a regular checking account after six to twelve months of responsible management of the account.
Instead of offering a “check-less” checking account, other banks sometimes offer a regular checking account upon successful completion of a special bank account management class. The classes teach you how to properly and responsibly manage your finances to avoid future trouble with bounced checks, overdrawn accounts, etc.
Some banks that you may want to research during your quest to find the perfect bank are: Chase Bank, Key Bank, TCF Bank, Bank of America, and Fort Sill National Bank. These banks have been known for their leniency and less restrictive guidelines when opening a checking account. The website, http://www.badcreditinfo.com/non_chexsystemsbanks.htm can help you find the bank or credit union in your town that will work for you.
