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.