How ChexSystems Works

Many people have heard of credit reporting agencies like Experian, Equifax, and TransUnion before. These are agencies which keep track of all the debt history of consumers. It then creates credit scores on these consumers’ credit reports based on their history of making payments toward their debts. ChexSystems works in a very similar way because it is a consumer reporting agency which tracks the banking activity of consumers. Rather than tracking debt history, ChexSystems tracks a consumer’s history of activities pertaining to their checking accounts and savings accounts. ChexSystems monitors consumer transactions with these accounts and it also helps verify the identities of consumers for these banks.

ChexSystems will influence a bank’s decision to approve you for a new bank account when you go to apply for one. It doesn’t matter if you go to a credit union or big multinational bank because all these financial institutions share consumer information with one another. What bankers really focus on is if the individual had any previous bank accounts that were involuntarily closed due to suspicious activity or unpaid banking fees. ChexSystems takes all these factors into consideration when generating their own unique score for that individual.

Approximately 80% of all American credit unions and banks have implemented ChexSystems as part of their screening process of new account applicants. ChexSystems is owned by a subsidiary company called “eFunds,” which is owned by their parent company “Fidelity National Information Services.” According to eFunds, ChexSystems can now be found in more than 9,000 banking institutions worldwide. In the United States alone, more than 100,000 branches of banks have requested ChexSystems consumer reports.

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Frequently Asked ChexSystems Questions

What is ChexSystems?

ChexSystems is a consumer reporting agency which provides a customer assessment service to banks and financial institutions all across the country. This assessment is based on the banking history of that individual in which ChexSystems keeps track of in their database. Whenever a person opens a new bank account, for example, that bank will ask ChexSystems for a consumer report on that person to see if they’ve had trouble with any of their previous bank accounts. This will help the bank determine whether they should approve the new account or not. This could be either a checking account or a savings account too.

Is ChexSystems a credit bureau?

ChexSystems is a consumer report agency, not a credit bureau. Although credit reports can influence their consumer reports, they do not actually create a credit score. However, the Federal Fair Credit Reporting Act does govern ChexSystems in the same way as well as any state statutes which may be applicable.

Who can see my ChexSystems consumer file?

The Federal Fair Credit Report grants privacy rights to every consumer regarding their personal consumer information, whether it is gathering information or sharing information. This means any credit or consumer reporting agency cannot disclose your information without your consent. As the consumer, you are entitled to request a free copy of your consumer report at least once per year. The only way it can be disclosed to other entities is if you give written permission for them to see it. When you apply for a new bank account, for example, you will likely be filling out a form where you are giving this permission to the bank so they can obtain your consumer report on your behalf. But if you don’t do this and there is no business transaction being initiated by you, then no one is allowed to legally see your consumer report.

Why did ChexSystems reject my account?

ChexSystems does not make the decision to approve or reject any account. They just provide consumer information to financial institutions. These institutions then decide if they should reject or approve the account based on the information they receive from ChexSystems.

How long does reported information stay on my file with ChexSystems?

Your reported information is going to stay on your ChexSystems record for 5 years after the date it was first reported. The only exception is if the source which provided the information requests to have it removed from the record.

How do I contact ChexSystems?

You can always go to the ChexSystems website and see all their contact information. They have a mailing address, fax number, or telephone number that you can use.