“Credit” Report for Checking Accounts
Most of us are familiar with the fact that the way you use credit is important and reported to credit bureaus. In fact, your ability to get credit is largely based on reporting and scores from credit bureaus. Click here to get more information about credit scores. Did you know there is also a consumer reporting agency for how you manage your checking and/or savings account(s)? It is called ChexSystems.
While I was in banking, this was another sign that people did not know how to manage their money. Potential customers would get a new job and wanted to get direct deposit or wanted to avoid check cashing fees by opening a checking account. A part of the account opening process is a ChexSystems inquiry, which usually takes less than 30 seconds. About 80% of banks and credit unions use ChexSystems. If the report comes back with negative information, then the account opening request is denied. However, there may still be options such as a second chance checking account.
Here are some facts about ChexSystems:
- You will be reported to ChexSystems if your checking and/or savings account is closed with a negative balance of $100 or more. Check with your bank or credit union to see how long you have to bring the account to a positive balance before it is reported.
- You can be reported to ChexSystems for several reasons including excessive overdrafts, unpaid negative balances, fraudulent activity, involuntary account, closure, etc. (Click on the link for a summary of information reported to ChexSystems.
- Negative information reported to ChexSystems stays on record for five years. Even if you pay off the balance(s) owed, the negative information may show “paid” but it will remain on the report.
Now you can see why avoiding NSF and Overdraft fees is not the only reason to manage your money and your checking and savings accounts. Money management might seem minor but it can have major consequences and become very expensive! Click here for information about balancing your checking account. It may seem challenging at first, but I am confident that you can do it. All the best!
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