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If you have a bad record in ChexSystems, you know how hard it is to find a bank or credit union where you can open an account.
Now, that search is over. A guaranteed bank account at BBVA Compass is a banking solution for customers who are denied by ChexSystems or who are looking for a Second Chance Checking account.
It is time to step into a bright financial future. Get back to the convenience of free online banking and bill pay, and apply today for your free checking account and debit card!
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Non ChexSystems Banks & Second Chance Checking Accounts: Here Is How to Open a Bank Account When You Are Rejected by ChexSystems
You walk into your local bank branch and sit down with your bank representative to talk about opening a checking account. Maybe you’ve been through some financial difficulties in the past, but you are ready to get back on track. But maybe not. You may think your financials are in good shape.
You wait with bated breath through the application process, only to let it out in a sigh of disappointment.
The banking representative turns to you and says, “I’m sorry, but we can’t open an account for you right now. You were rejected by ChexSystems.”
At that point, the banker probably explained ChexSystems to you in detail. If you haven't already, you can read our in-depth guide to ChexSystems and why it may be having a negative impact on your financial life.
Denials like these are surprisingly common. In fact, CNN has reported that approximately 15% of bank applicants are denied regular bank accounts.
In this article, we will tell you everything you need to know about ChexSystems and how you can open a bank account right now, even if you have been rejected because of it.
Table of Contents
- Is ChexSystems Fair?
- Your ChexSystems Score
- How Can You Open a Bank Account With a Low ChexSystems Score?
- What are Second Chance Bank Accounts?
- What are Non-ChexSystems Bank Accounts?
- At a Glance: Banks That Do Not Use ChexSystems vs. Banks That Offer Second Chance Banking
- How Easy or Hard Is It To Open an Account with a Bank that Does Not Use ChexSystems for Customer Screening?
- Account Services For Banks Accounts Which Do Not Use ChexSystems
- Can You Dispute ChexSystems?
- Other Options When You Cannot Open a Traditional US Bank Account
- Banking Without ChexSystems FAQ
Let’s get started!
Is ChexSystems Fair?
We don’t think so. Many customers end up in ChexSystems simply because they neglected to pay a minor overdraft fee for too long, or committed some other trivial offense (it may be so trifling you do not even remember it).
Plus, even customers who have made major mistakes in the past can turn their lives around. Everyone deserves a second chance.
And in some cases, the reason you are listed in ChexSystems has nothing to do with your own actions. You may be in ChexSystems because you are the victim of identity theft. You do not deserve to be punished because someone else has committed a crime under your name.
It also does not help that ChexSystems never shows positive information about your account, only negative. So it does not really present a full portrait of a customer. There is simply not enough information for the bank to appropriately put you in context.
That is why we decided to do something about this and put together a comprehensive list of banks that do not utilize ChexSystems or which are offering second chance checking accounts.
Your ChexSystems Score
Once you discover you are in ChexSystems, it can be useful to find out your ChexSystems score.
Curiously, a lot of other websites which attempt to help consumers deal with ChexSystems seem completely unaware that ChexSystems scores exist.
This is probably because ChexSystems scores are regularly confused with credit scores.
You actually have a ChexSystems score and a credit score, but they are not interchangeable. The scoring models can be quite different.
Your ChexSystems score ranges from 100 to 899. The higher your score, the better; a high score represents a low risk.
You can obtain your score directly from ChexSystems by printing, mailing, or faxing an official Score Order Form to Chex Systems, Inc. You should hear back within 15 business days.
Your credit score on the other hand will fall somewhere between 300 and 850. Once again, the higher the score, the lower the risk. You can obtain your credit score by checking your credit card or loan statement, buying your score from a reporting agency, or going through a “free credit score” service (these are often ad-supported). You can also talk to a non-profit counselor.
Alternately, you are entitled to one free credit report every year from each of three major credit bureaus: Equifax, Experian, and TransUnion.
Once you know both your credit score and your ChexSystems score, you will have a better idea of your standing and what you need to do to raise both.
How Can You Open a Bank Account With a Low ChexSystems Score?
So what happens now? You still need that bank account and debit card. How can you open a bank account with a black mark on your record?
Your first thought might be to simply wait for your ChexSystems record to clear up.
This isn’t always an option, however. Even though ChexSystems can remove listings or change their status (say for example if you manage to clear an existing debt), this is not always in the cards. And even if ChexSystems does change the status of a listing, listings typically will not be removed for a period of five years.
There are two main options if you need to get a bank account now:
- Second chance bank accounts
- Banks and credit unions which do not run ChexSystems verifications
These two solutions are sometimes mentioned interchangeably, but they are two very different options. In this article, we are going to look mainly at banks and credit unions which do not use ChexSystems—but we will introduce you briefly to second chance bank accounts and other alternatives as well.
What are Second Chance Bank Accounts?
Second chance checking accounts are special kinds of accounts offered by banks and credit unions specifically to customers who are listed in ChexSystems. Sometimes these accounts are referred to as “fresh start checking accounts.”
This means that banks which offer these accounts do look at your ChexSystems record before approving you for an account. There is no guarantee that you will be approved. Your chances are certainly better than they would be with a standard bank account, but you might still be rejected. Learn more about second chance checking and whether this might be a suitable option for you.
What Are Non-ChexSystems Bank Accounts?
Unlike banks which provide second chance checking accounts, banks which provide non-ChexSystems accounts do not use ChexSystems to gather information on you at all.
Banks which do not use ChexSystems for customer verification may turn to your credit report to learn more about your history and credibility, which is why it is important to learn your credit score before you apply for fresh start checking.
It is perfectly possible to have an acceptable credit score while still having a poor ChexSystems score.
So even if you are rejected by a bank which provides second chance accounts, you may be approved by a bank which does not use ChexSystems at all.
At a Glance: Banks That Do Not Use ChexSystems vs. Banks That Offer Second Chance Banking
Second Chance Bank Accounts:
- Low or no minimum balance requirements
- Minimum deposit may be required
- Option to upgrade to a regular account within 6 months to a year
- May include monthly fees
- You may need to meet special requirements, like attending a class in money management or setting up direct deposit
- Overdraft protection available for some accounts
- Free services include online bill pay and use of a debit card
- Your ChexSystems record will still be referenced when you apply, and banks do have the option to reject you because of your ChexSystems score
Accounts at Banks Without ChexSystems:
- Low or no minimum balance requirements
- Minimum initial deposit may be required
- Some accounts may include monthly maintenance fees (we can recommend completely free checking accounts)
- Option to upgrade to a standard account once you prove your reliability to the bank or credit union
- Some accounts may include overdraft protection
- Free services like online bill pay, debit card, and check writing included
- The bank or credit union will not look at your ChexSystems record, but may look at your credit score or Early Warning System (EWS) or Telecheck data
In short, these accounts provide you with similar services with similar restrictions. The biggest difference between them involves the approval process.
How Easy or Hard Is It To Open an Account with a Bank that Does Not Use ChexSystems for Customer Screening?
A common piece of misinformation we find circulating the web is that there are numerous banks out there which do not use ChexSystems for customer screening.
This is simply not true. On the contrary, around 90% of banks and credit unions run ChexSystems and/or EWS for verification.
So if you are simply applying at bank after bank without doing your research, do not be surprised if you are rejected time and again. With only around 10% of banks not running ChexSystems, the chances of finding one on your own are slim.
That is why we have done the hard work for you and put together a list of the best bank accounts without ChexSystems and second chance checking options. These are the accounts which you are most likely to be approved for and which will offer you the best services and the fewest restrictions and fees. Some of our recommended checking accounts are entirely free with no monthly fees.
Account Services For Banks Accounts Which Do Not Use ChexSystems
Features vary from one account to the next, but on the whole you will find that aside from a few limitations (for example a maintenance fee or lack of overdraft protection on some accounts), your non-ChexSystems account will function very much like any regular bank account.
In fact, you will get to enjoy most of the same features and conveniences, including:
- Online banking. View or manage your bank account online at any time, on your desktop, laptop, or mobile device
- Pay bills or transfer money online
- Go paperless with your statements
- Write unlimited checks
- Deposit checks through your mobile device
- Enjoy the convenience of ATM transactions without fees
- Pay for purchases in person and online using your debit card
Many customers who do not qualify for a regular bank account are surprised by the rich features and functionality they can enjoy when they get a bank account without ChexSystems.
Can You Dispute ChexSystems?
You may be wondering whether you really need to apply for a bank account which does not use ChexSystems to screen customers.
If your ChexSystems score is unfair, can’t you just dispute it and get it adjusted?
There are actually a number of steps you can take to dispute ChexSystems. Read our step-by-step guide on how to get off ChexSystems.
It is not easy to get removed from ChexSystems. Even if you follow up and submit repeat requests through multiple channels, your request may still be denied.
For that reason, unless you are very confident that your case will succeed, you may just end up wasting time.
If you get a bank account without checking ChexSystems right now, you can begin proving to the bank or credit union that you are reliable and compliant. In many cases, that is the fastest and best way to get your ChexSystems record cleared.
Other Options When You Cannot Open a Traditional US Bank Account
What if you do not want to open a bank account without ChexSystems or a second chance bank account?
There are a few other stopgap options you can try, but none of them offer you the convenience of a real, working bank account.
- Prepaid cards: Prepaid cards used to have expensive fees, but those fees have dropped steadily over recent years, and now these cards are quite affordable. While they do not provide you with the functionality of a bank account, there is no minimum balance and no credit check or ChexSystems verification. Many prepaid cards do allow you to set up direct deposit, withdraw for free from ATMs, and even manage your money and pay your bills online.
- Secured credit cards: If you have some fluidity in your budget, you can opt for a secured credit card. With this type of card, you provide some cash as collateral to your card issuer. These cards have low limits and high interest. They may carry high fees as well. But this is a great way to build up credit.
- E-wallet: If you are a member of an e-wallet like PayPal, you may be able to get a debit card from the website. Through your e-wallet, you can send and receive money and manage your finances online. You can use the card the site issues you to pay for purchases online or offline.
- Brokerage or money market accounts: If you are interested in a brokerage or money market account at an institution like Merrill Lynch, Prudential Securities, or Charles Schwab, that may be an option, as these institutions do not use ChexSystems for verification. There are some high minimums for some of these accounts however, so they may not always be a suitable solution.
- Foreign bank accounts: If you cannot open a regular US bank account, you can consider opening a foreign account in USD. Canadian banks like the Canada Trust or the Bank of Montreal are often willing to accommodate US customers.
As you can see, these are all imperfect solutions. They can help you out in the short run, but none of them replace the need for a functioning checking account.
Banking Without ChexSystems FAQ
Q: Can I dispute ChexSystems?
A: You can, if you believe that there is a good reason they would consider clearing your record (fraud for example, or a simple mistake on their part). It is very hard to get a ChexSystems record adjusted or cleared however, so walk into the process with realistic expectations.
Q: How do I contact ChexSystems?
A: You may reach ChexSystems at the following address:
Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
You also may call them at the following number: 1-800.428.9623
Q: What is the best method for getting removed from ChexSystems?
A: If you can actually get ChexSystems to adjust your score or remove your record altogether, that is the most desirable outcome. Most of the time, however, ChexSystems will not be open to clearing your record. For this reason, the best method to getting yourself cleared is to open a second chance bank account or a bank account which does not run ChexSystems.
It will take five years of good behavior before your record is wiped clean, but if you stay the course, you can do it. In the meantime, you can build a relationship of trust with a new bank or credit union. Work toward paying off your debts, and once you do, request your creditors contact ChexSystems to have the information removed from your record.
Q: Is there any way to increase my chances of getting approved for a regular bank account?
A: There are a few things you can do. Avoid applying for overdraft protection, and you may be able to skip the ChexSystems check. Head to the bank near closing time. An employee in a rush to get out the door may also decide not to bother with ChexSystems before approving you for an account. You are most likely to get away with this at a small local bank or credit union.
Also avoid applying for an account with your spouse or partner if you think that their record may be causing the problem.
Q: How hard is it to get approved for a second chance bank account?
A: That depends on how bad your ChexSystems score is, and also on the context which your credit score and other financial records provide. You are in the target market for this product, so there is a very good chance you will be approved, but denials do happen.
Q: How hard is it to get a checking account without ChexSystems?
A: It may be easier to be approved for a bank account which does not use ChexSystems for verification. If your ChexSystems score is very low, you could very well end up being denied a second chance bank account and yet still get approved for a non-ChexSystems account — especially if your credit report is good.
Q: Can I do everything I need with a bank account which doesn’t use ChexSystems for verification?
A: Yes. Bank accounts which do not use ChexSystems and second chance bank accounts both provide you with the same functionality you could expect from a regular account.
Q: How can I prevent being listed on ChexSystems in the future?
A: ChexSystems reports contain information on unpaid overdraft fees, bounced checks, check orders, credit inquiries, and suspected fraud. Pay off any overdraft fees you accrue right away, and stay up to date on your payments. If you attempt to make a payment through your bank account, make sure you have enough money in the account to cover it (avoid overdrafting altogether if you can). Also make sure you are not writing checks which bounce.
Q: I need to cash a check and/or pay a bill right now. What can I do?
A: There are businesses which will cash checks for you, though they do charge a fee. Money orders are a good option for paying your bills securely, though you must purchase them. They often cost less at grocery stores than they do at banks.
Q: What is the fastest way to find a bank which does not use ChexSystems?
A: The easiest and fastest way to get started is to use an online directory of banks which do not use ChexSystems. On our site, you can select your state and search locally for relevant banks and credit unions.
Conclusion: You are Just a Few Clicks Away From a Fresh Start
Few things are more frustrating than trying to open a bank account only to be denied. You have bills to pay, purchases to make, and payments to receive. In short, you are ready to get on with your financial life, and that is impossible to do without a checking account.
Thankfully, there are banks and credit unions out there which understand your predicament and offer products geared toward helping consumers just like you. A fresh start is closer than you think. Click below to open a bank account now without worrying about the hassle of ChexSystems verification!