Many banks and credit unions use the services of ChexSystems to help them determine whether or not to open new accounts. ChexSystems maintains a database on consumer's bank accounts that have been mishandled. If you have written numerous bad checks or closed an overdrawn bank account in the recent past, your name and how you mishandled your previous bank account, has probably been supplied to ChexSystems. Negative information remains in ChexSystems database for 5 years (versus 7 years for the credit bureaus).
If you wish to get a copy of your ChexSystem file showing what information is entered, please go to ChexSystems Web site. (You can see a sample report here as well.) Under the FACT Act, you are entitled to a free copy of your report every 12 months.
If you find an error on your report, you can dispute the item(s). ChexSystems is required to research any entry that you believe is inaccurate and will report back to you with their findings in approximately 30 days. If the reinvestigation does not resolve the dispute, you may be able to add a statement, in 100 words or less, to your file giving your version of the dispute. ChexSystems will include a summary of your statement in future reports.
Identify theft victims will also want to keep ChexSystems in mind. Just as with the credit bureaus, you can place a security alert you’re your ChexSystem file. You can also “opt-out” of prescreened offers by calling 1-877-OPTOUT 5. (The number to opt-out with the credit bureaus at 1-888-5 OPTOUT.)
Like the three major credit bureaus, ChexSystems is regulated by the federal Fair Credit Reporting Act (FCRA). You can read the FCRA by visiting the Federal Trade Commission’s Web site.