Banks check your banking history the way lenders check your credit. ChexSystems is one of the main places that history is kept.
In a nutshell
- ChexSystems is a consumer reporting agency that tracks how people have handled checking and savings accounts.
- Banks report problems such as unpaid negative balances and suspected fraud.
- Records can generally stay on file for up to five years.
- You can get a free copy of your report every 12 months and dispute inaccurate information.
When you apply for a checking or savings account, many banks look at your history with past accounts. ChexSystems is a common source of that information.
What ChexSystems is
ChexSystems is a consumer reporting agency covered by the Fair Credit Reporting Act. Banks and credit unions report certain account problems to it, and other banks check those reports when you apply for a new account.
What gets reported
- negative balances that weren’t repaid
- accounts closed by the bank for misuse
- suspected fraud
- some histories of bounced checks
Everyday overdrafts that you repay usually aren’t reported. Problems are typically reported when an account is closed with money still owed.
How long records last
Records can generally stay on your ChexSystems file for up to five years. A bank may decline your application during that time, though policies differ, and some banks offer second chance accounts designed for people with records.
Getting your report
| What you can do | How |
|---|---|
| Request your free report | Once every 12 months, through ChexSystems |
| Dispute an error | Contact ChexSystems and the bank that reported it |
| Place a security freeze | Request one with ChexSystems |
| Get a report after a denial | Request it within 60 days of the bank’s notice |
Do this
If you owe an old balance, contact the bank that reported it. Once it’s paid, ask for written confirmation and for the bank to update your ChexSystems record as paid.
Be wary
Be wary of companies charging to “remove” ChexSystems records. Accurate information can stay for its full reporting period, and you can dispute inaccurate information yourself for free.
Building a clean record again
Paying off old balances, avoiding unpaid overdrafts and managing a basic account well for a year or two can open doors to standard accounts again. If a bank has already turned you down, our guide to why applications get denied explains your rights and next steps.
Good questions
Is ChexSystems the same as a credit report?
No. It covers deposit accounts, like checking and savings, rather than loans and credit cards, and it doesn’t produce a credit score.
Will paying the old balance remove the record?
Paying it won’t necessarily remove an accurate record, but you can ask the bank to update it as paid, which some banks consider when you apply.
Do all banks use ChexSystems?
Many do, but not all. Some use other screening companies, such as Early Warning Services, and some online banks and credit unions screen differently.
This guide is general information, not financial or legal advice. Bank fees, account terms and screening policies vary by bank and change over time, so check the account’s fee schedule and terms before you open it. For federal rules, see the Consumer Financial Protection Bureau and the FDIC.