ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Does Being on Chexystems Give You Bad Credit?

Updated on February 10, 2011
Have you been turned down for a new checking account?
Have you been turned down for a new checking account?

If you've been turned down for a new checking account or savings account lately with your bank, odds are your name might have turned up in the Chexsystems database. Regardless of how high your credit score is or how much money you have to deposit, getting a checking account while listed in Chexsystems is challenging since you've been flagged as a high risk for all banks and credit unions. Being in Chexystems, however, does not necessarily mean you have bad credit. 

The Purpose of Chexsystems

Banks are all about minimizing losses and maximizing profits. Chexsystems makes this process even easier by providing banks with a database containing the names and personal information about all individuals who left bank debts unpaid in the past. 

While banks lend money to consumers for personal loans, auto loans, mortgages, etc., Chexsystems only lists those whose debts were directly related to irresponsible behavior with their bank accounts. For example, overdraft fees you left unpaid or bad checks you wrote to merchants could get you listed in Chexsystems. Your name will not be inserted, however, unless your bank closes your account for leaving the debt unpaid. Thus, you have plenty of time to avoid ending up a banking outcast. 

How Long Does Your Name Stay in Chexystems ?

Once your name appears in the Chexystems database, it will remain there for up to five years. Fortunately, you can dispute these entries in much the same way that you would dispute standard credit reports. Although your Chexsystems record does not impact your ability to get a new credit card, a new job or housing the way a standard credit report does, it still falls under the jurisdiction of the Fair Credit Reporting Act – which gives all consumers the ability to dispute debt records with both the credit bureau reporting the account and the original creditor.

Pay your bad bank debt
Pay your bad bank debt

Does Paying the Debt Remove You From Chexsystems?

When you discover that your name is in the Chexsystems database, the very first thing you should do is pay off the checking account debt that originally landed you there. Paying the bank does not result in Chexsystems removing your name, and it won't help you get a new checking account. It will, however, work in your favor with some banks. If the bank happens to use a second-chance checking program, you must pay off your old, unpaid debt before you become eligible for a new bank account. 

Does Being in Chexsystems Give You Bad Credit?

Although Chexsystems is technically a credit bureau, its reports are limited only to banks and checking account behavior. Because the credit bureaus do not share information with one another, having a debt in Chexystems will not necessarily impact your credit report and cause your credit score to drop.

Keep in mind, however, that unless you pay off the debt quickly, the bank will likely sell the debt to a collection agency. The collection agency can and will report you to the three major credit bureaus – damaging your credit. 

Get a checking account while in Chexsystems
Get a checking account while in Chexsystems

Can You Get a New Checking Account While in Chexsystems?

The odds are against you being able to get a new checking account with a standard brick-and-mortar bank while your name remains in the Chexsystems database. Some banks offer second chance checking programs specifically for individuals with bad credit or a bad banking history. These programs allow you limited benefits but grant you access to a new checking account – regardless of your history with debt. 

Yet another option you may consider is an online checking account. Online checking accounts often do not hold consumers to the same strict standards that brick-and-mortar banks do, and its much easier to obtain an online checking account with bad credit or a debt in Chexystems than it is to convince local banks to accept you as a new client. 

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)