How long does it take to get out of chexsystems

By Sarah R
Modified on February 20, 2024
how long does it take to get out of chexsystems

Have you recently been denied access to a bank account, checking account, savings account, or other banking services? If so, you may have received notice that your application was denied due to information found on your ChexSystems report. But, what is a ChexSystems report, and how long does it take to get out of ChexSystems? 

While ChexSystems reports and credit reports are not the same, they collect data on similar topics. A credit report is a comprehensive look at a person’s financial records and history and includes both positive and negative information. On the other hand, ChexSystems reports typically just focus on negative information that could potentially harm a financial institution if they chose to work with an individual. 

Unfortunately, a negative mark on your ChexSystems report can last up to five years. However, they are some steps you can take to possibly get yourself out of ChexSystems sooner. Here, you’ll find all the personal finance information you need on ChexSystems!

What Is ChexSystems?

ChexSystems is a consumer credit reporting agency that reports to banks and credit unions, as well as other financial institutions. This consumer reporting agency collects information about delinquent accounts, past due payments, negative balances, and additional negative information regarding a consumer’s existing accounts. 

The purpose of a ChexSystems report is to keep a record of potential red flags that might indicate to banks, credit unions, and other financial institutions that a person may be a monetary liability. For example, a bank may deny an application for someone trying to open a new bank account if they see their ChexSystems report has an extensive history of delinquent or defaulting payments. 

A poor ChexSystems report has the ability to affect a person’s ability to open new accounts, apply for loans, and general consumer relations. 

What Goes on a ChexSystems Report? 

Below are a few examples of financial habits and history that you may find on a ChexSystems report.

Forced Account Closures 

When a bank account holder shows a repeated history of overdrawing, failed deposits, or account inactivity, the bank may be forced to close the account. Having an account involuntarily closed may be an indicator that the former account holder is financially irresponsible.

History of Bounced Checks

A bounced check is when someone writes a check for more money than they have in their checking account. Sometimes, a check can take a few hours or even days to come through as bounced. This delay puts people receiving bounced checks at risk of failing to ever receive the money they were due. Banks keep track of bounced checks as they may be a potential sign of fraud or general financial irresponsibility. 

Records of Overdraft or Late Fees

Instead of bouncing a check, some checking accounts have features that allow people to spend more money than they technically have in their accounts. This overspending would result in a negative bank account balance and a potential overdraft fee. While overdraft fees allow people to avoid bounced checks, they are still signs that an account holder doesn’t know how to handle money responsibly.

Neglected Balances 

A ChexSystems report will also keep track of the unpaid balances an account owner has. Unpaid balances with credit cards, loans, bills, or other financial responsibilities can be a clear indication that an account owner cannot be trusted to pay back the money they borrow. 

Abuse of Credit Cards, ATMs, or Other Financial Accounts 

Account abuse for credit cards or ATMs would involve activities like habitually draining your credit limit during each credit cycle, failing to pay back balances due, or frequent attempts to withdraw more money than available in an account. 

Activity That Indicates Potential Fraud or Identity Theft 

Fraud and identity theft are serious crimes, so it is crucial for banks and financial institutions to avoid doing business with individuals who show signs of being involved in such activity. 

Recent Applications for Financial Accounts 

Applications for new financial accounts are something that both ChexSystems reports and credit reports keep track of. When you apply for a loan, credit card, or other financial product, you go through a hard credit check. Records of too many hard credit checks within a short period of time may indicate to banks and other lenders that you are not an ideal account holder. 

Does Being In ChexSystems Affect Your Credit Score? 

While being in ChexSystems does not directly affect your credit score, it usually correlates with other habits and behaviors that affect your overall score. In this way, ChexSystems reports and credit reports are loosely related. Some items that may affect both your credit score and your Chexsystems report are: 

  • Payment History — How often you make your payments on time. Making payments on time is the most influential factor that affects credit. 
  • Hard Credit Inquiries — How often you apply for new loans, credit cards, or other financial products. 

Some financial data that will definitely affect your credit score but not necessarily your ChexSystems report are: 

  • Credit Mix — The different types of credit you have, such as credit cards, student loans, mortgages, personal loans, etc. 
  • Credit History Length — How long you have had open and active financial accounts. 
  • Debt-to-Income Ratio — How much money you owe your various creditors compared to how much income you regularly bring in. 

How To Get a New Bank Account or Checking Account When You Are in ChexSystems

Are you worried about ChexSystems holding you back from getting a standard bank account? Fortunately, there are some steps you can take in order to get a new account with a relevant bank, even when you have a negative ChexSystems report. 

Consumers struggling to get approved for a new bank or checking account may inquire about second chance accounts. Second chance checking accounts are a special type of financial account designed for people who may be a traditional lending risk. 

Many second chance bank accounts come with restrictions such as required balance amounts, prepaid debit limits, or recurring fees. Getting a second chance bank account can be a great first step towards recovering your finances and getting back on your feet. Once you’ve had success using your second chance bank account, it may be easier to inquire about a standard traditional bank account since you have some positive history on your side. 

Tips for Getting Out of ChexSystems

Below are some essential tips for people who are looking to get out of ChexSystems. Since ChexSystems reports and credit reports contain records of similar financial habits and activities, chances are, if you improve your ChexSystems report, you will also improve your credit report. Try the tips below if you want to get out of ChexSystems, improve your credit report, or develop good financial habits

Pay Off Your Past Due Bills and Balances 

One of the best things you can do to get out of ChexSystems is to pay your outstanding debts. You can try debt-paying challenges like the snowball method or the avalanche method. Getting rid of past-due debt will help you improve your ChexSystems situation and save money on late fees and other financial penalties for not paying bills.  

Check Your ChexSystems Report for Accuracy 

If you receive a ChexSystems report, make sure you review it carefully to ensure fair debt collection practices. You may find that there is incorrect information on your report that is hindering you from getting a checking account with a bank or credit union. To dispute errors, you can call the ChexSystems phone number at 800-428-9623 or visit ChexSystems online.

Organize Your Finances

To put a halt on harmful financial habits like overspending, organize your finances and create a budget. You may find that being more mindful about your spending may be able to help you put more money in savings accounts. Then, when you have a bit of extra income lying around, you can use those funds to catch up on any past-due bills or other delinquent debts. Learning to save money is also an important part of becoming financially stable

Make Informed Financial Decisions 

Before you commit to any financial product, make sure you do your own independent research first. Doing research on your own and looking into different lenders and financial products may save you from making decisions that could harm your overall financial situation. For example, if you are looking for a quick cash loan, research may tell you that a personal installment loan is a more convenient option than fast payday loans

How To Get a Copy of Your ChexSystems Record  

Because of the Fair Credit Reporting Act, federal law entitles consumers to a free ChexSystems report each year. Consumers are also entitled to a free report if they are denied an application for an account with a bank or credit union. 

To receive a free copy of your ChexSystems reports, you can visit the ChexSystems website, call the ChexSystems consumer disclosure report number at 800-428-9623, or send in a request by fax or mail.  


What Is ChexSystems? – Experian

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