Bag of money in hand

Don't let Errors and Negative Information in a ChexSystems Report Keep You From Opening an Account! Fix It Instead!

The bad news is that erroneous or negative information in a ChexSystems credit report can prevent you from opening new accounts at banks and credit unions. The good news is that you have the legal right to correct mistakes, repair certain situations, and get compensation if you've been unfairly harmed. We know the law and how to help you recover.

Quick Answers

What is a ChexSystems report? Good question! In the world of consumer reporting, there are many different kinds of reports that are generated and sold, containing multiple and varied categories of information about you. Companies use these reports to make all kinds of financial, employment, and housing decisions. Consumer reporting agencies (CRAs) are the companies that create these reports. You are most likely familiar with the three largest and most utilized CRAs (Experian, Equifax, and TransUnion), also known as the credit bureaus. But there are others, and ChexSystem is among them.

A ChexSystem credit report is a specialized type of report that focuses on reporting certain types of banking and checking information. Banks and credit unions use these reports to assess the amount of risk you pose when you apply to open an account.

If you’re denied account opportunities due to mistakes or inaccuracies in a ChexSystem report, if you want to try to improve your report, if you need to file a ChexSystems dispute, or if you are at the point of considering a lawsuit, we can help. As highly experienced consumer law attorneys, the team of lawyers at Consumer Attorneys has helped thousands of consumers in your situation. We’re here to listen, advise, and guide you toward the best possible legal outcomes based on the facts and the law. Read on, then reach out!

About ChexSystems Company

ChexSystem is a company that sells specialized consumer reports dealing specifically with pertinent and reportable banking information. The Consumer Financial Protection Bureau (CFPB) explains that ChexSystem is owned by a subsidiary of Fidelity National Information Services, Inc. The CFPB recognizes ChexSystems as a consumer reporting agency (CRA) under the Fair Credit Reporting Act (FCRA). As a CRA, ChexSystems is subject to regulation by federal and state law, and you are entitled to legal protections when it comes to the information that ChexSystems reports about you.

How Does ChexSystems Create Credit Reports?

ChexSystems creates credit reports by using algorithms to gather and sort data and generate reports. Typically, this occurs as part of the application process for a new banking opportunity. For instance, if you want to open a new checking account with a selected bank or credit union, you have to apply.

As part of the application process, you will be asked to consent to a credit or financial check, and the financial institution will electronically submit your details to ChexSystems to request a report. ChexSystems also generates a consumer score ranging from 100 to 899. As with credit scores, a higher score is better.

Once the algorithm generates the report, it is used by the bank or credit union to determine whether your application will be accepted or denied. Notably, ChexSystems does not make any decisions regarding your application. It simply supplies the data, along with the computer-generated score, and the banking institution makes the decision on your application in accordance with its own policies.

Are you on a ChexSystems list?

If you have been researching, “Am I on a ChexSystems list?” Or, even if you get the name wrong (as many people do!) and research, “Am I in Check Systems?” The answer is yes, sort of. At the time of your account application, your name will be checked against the ChexSystems database, and a report can be run on anyone.

If you don’t have any adverse data, your score will be high, and your report will be clear. If you do have adverse data, your score will reflect the amount and degree of negative events within the five-year reporting period, and they will be included in the report.

How Long Does a Credit Report from ChexSystems Take?

How long does a ChexSystems report take? They are generated quickly at the time of application when you attempt to open a checking or similar account. However, if you simply request your ChexSystems report on your own, then it typically takes up to five business days to receive.

What Information Does ChexSystems Provide in Their Credit Reports?

ChexSystems specializes in reporting on consumer banking data, so you can expect to find information on checking and savings accounts, including ones that you’ve opened, closed, and applied to open. Importantly, the report also indicates the reason for any reportable account closure.

The ChexSystems website specifies that its reports include banking account closures, reported incidents of bounced checks (a check that did not have adequate funds when the recipient attempted to cash it), the frequency of check orders you’ve placed, and the number and timing of inquiries you’ve made with respect to opening new banking accounts.

In addition, ChexSystems also notes that many typical categories of consumer data are not included in a ChexSystems report. These include credit scores (as generated by the credit bureaus); criminal records; educational, employment, and rental histories; marital status; open/active account data (current accounts in good standing); and accounts closed by you that had no red flags or concerns from a banking perspective.

How Does Information Get on My ChexSystems Credit Report?

ChexSystem gets its information about you from the financial institutions you have a direct relationship with, such as banks, credit unions, and others. These entities report adverse information about checking or similar accounts.

How Does ChexSystems Determine My Credit Score?

ChexSystems doesn’t determine your credit score, but it does generate a ChexSystems consumer score based on the information pulled into your ChexSystems report. The credit bureaus (Experian, Equifax, and TransUnion) generate your credit scores (each using slightly different algorithms). However, these credit scores are not included in your ChexSystems report.

How Long Does Information Stay On ChexSystems Credit Report?

Your ChexSystems credit report retains information for five years. This means that after five years, the info about an event (such as a bounced check) becomes non-reportable. So old, unfortunate financial events will not haunt you forever.

Which Companies Use ChexSystems Credit Reports?

Banks, credit unions, and similar entities use ChexSystems. While ChexSystems doesn’t identify the specific companies that use its platform, Forbes reports on a National Consumer Law Center finding that over 80% of banks use ChexSystems or an equivalent screening report during the new account application process. So, if you’re applying to open a checking account, it’s far more likely than not that you will be subject to a ChexSystem (or similar) screening.

ChexSystems Identity Theft Protection

ChexSystems offers you the ability to place a security alert on your check systems account or to place a security freeze on your account. Both of these measures are meant to require additional screening protocols prior to authorizing any credit checks under your name in order to prevent identity theft. So, you will either be asked to verify your identity through additional steps, or you will have to lift a freeze in order to conduct financial business.

Can Errors Occur in ChexSystems Credit Reports?

Yes, errors can occur in your ChexSystem credit report. Up to one-third of consumers find mistakes in their consumer reports. This means that wrong, duplicate, incorrect, inaccurate, and otherwise bad data makes it into some ChexSystems reports, just as it does any other consumer report. In fact, if you research class actions, you’ll find information about credit reporting errors involving many different companies, including the credit bureaus.

Inaccuracy in ChexSystems Credit Report

If there are inaccuracies in your ChexSystems credit report, then you may need to dispute the information or sue ChexSystems, depending on the nature of the situation. A credit report lawyer can explain your legal rights and advise you on how to dispute ChexSystems, when to file a lawsuit, and what type of compensation you might be entitled to.

ChexSystems Mixed File

In the credit reporting world, mixed files are consumer reports in which information from someone else is erroneously mixed into your file. They’re also called co-mingled files. With ChexSystems reports, this might look like reports of bounced checks or forced closures for an account you never held. While sometimes these types of errors are related to identity theft, other times they are the result of mixed files.

Mistakenly Reported as Deceased by ChexSystems

Another relatively common reporting error is the wrongful reporting of a consumer as deceased. This error can start at the data furnisher level or at a high level, like within the Social Security Administration (SSA). It is an error that results from another underlying error. Meaning, a data entry error or mixed file error can lead to you being falsely flagged and reported as deceased.

If you are mistakenly reported as dead on any consumer report, you need to take it seriously because it can have enormous consequences if left unchecked. Contact a consumer protection attorney to discuss how to remove it from your ChexSystems report and resolve it across the entirety of your consumer data profile (at the credit bureaus, SSA, and elsewhere).

What Are the Consequences of Having Errors in Your Credit Report?

Errors in your ChexSystems credit report can be immediate or more far-reaching, such as:

  • Denied applications. Obviously, the most immediate impact of wrong information in a credit report of any kind is failed or suspended applications and denials. Something that results in this kind of disruption in your financial life needs a response built around tactics that are legally astute and effective.
  • Worse accounts or terms. Alternatively, you may find out that your application is still on track to be approved, but the account you’re being permitted to open is meaningfully worse, typically due to burdensome terms and conditions.
  • Snowball effect. Credit reporting errors have a way of increasing in impact the longer they stick around. This is called the snowball effect, and to avoid it, you should act as soon as you see items that are inaccurate, misleading, or false. Don’t wait for a minor error to double into a major error before acting.

You Can Contract ChexSystems if You Need to Correct an Error in Credit Report

ChexSystems, like all consumer reporting agencies (CRAs) under the Fair Credit Reporting Act (FCRA), is legally required to provide a mechanism for you to dispute errors on your report. So, if you’re wondering how to fix a ChexSystems report, the answer is that you can file a dispute, pursue legal advice, or both. We recommend beginning with legal advice.

  1. Contact a lawyer. With reporting errors, sometimes you need to file a dispute before filing a lawsuit, and sometimes you don’t. It depends on the facts of the situation, the nature of the error, and the applicable state law where you live. This is one of many reasons why beginning your error-correction journey with a legal consultation is a great idea. A lawyer can also offer you advice about the specifics of filing your dispute if that’s the recommended approach.
  2. File a dispute. If a lawyer advises that you should file a dispute, ChexSystems provides information about the various options on its website. There is an online dispute platform under a tab labeled “Submit Request Online.” Information on filing a dispute via phone or mail is under a tab labeled “Submit Request by Other Methods.” We recommend filing a dispute via certified mail because online platforms frequently require you to waive the right to sue, and it is easier to document everything with dated postal receipts.
  3. Provide a letter and documentation. Write a detailed and specific dispute letter, clearly identifying which information in your report you are disputing. Include marked-up copies of your report. Provide documentation in support of your position that the information is incorrect or unreportable. Again, keep in mind that certified mail is the best option for sending the letter and supporting materials.
  4. Keep detailed notes. Keep a log of everything, including copies of everything you send, mail receipts, dates and times of correspondence or phone calls (if any), and names of people you interact with. Keep track of the days! ChexSystems has thirty days from receipt of your dispute to investigate and respond.
  5. Contact a lawyer. If you haven’t already done so, it is not too late to discuss your situation with a lawyer, even once the dispute is underway.

What to Do if You Do Not Receive Answers to Your Questions

If you have not received a response from ChexSystems within thirty days of their receipt of your dispute, then you should contact a lawyer (if you aren’t already working with one). Also, keep in mind that simply conducting an investigation and issuing a response is not the end of ChexSystems’s legal obligations.

If you receive a response that indicates the investigation was shoddy or insufficient or the errors have been confirmed rather than corrected, you should discuss your case with a lawyer. CRAs are prone to engaging in a cycle of investigation that simply reaffirms the same error. You have the right to the reporting of accurate information, error correction, and compensation.

You Can Sue ChexSystems if There is Incorrect Information in Your Credit Report

Learning how to clear your ChexSystems report of false information can be tricky and deflating. CRAs, like ChexSystems, can get trapped in a cycle of reaffirming reporting errors rather than adequately investigating and correcting them. This is why the Fair Credit Reporting Act (FCRA) gives you the right to sue ChexSystems for reporting errors. In addition, the FCRA makes ChexSystems (or other CRAS) pay for your legal costs and fees when you win.

Who Can You Contact to Solve the Problem with an Error in a ChexSystems Credit Report?

Contact a consumer protection lawyer like those at Consumer Attorneys. Our team of lawyers has over seventy-five years of combined practice experience helping consumers navigate the legal landscape of consumer reporting issues. We can help you, too.

Assistance in Disputing a ChexSystems Credit Report

The team of lawyers at Consumer Attorneys can assist you from the moment you discover reporting mistakes through to the final resolution of a lawsuit. Depending on the facts of your situation, we can guide you to error correction and compensation.

Lawsuits Against ChexSystems

As a nationwide consumer protection law firm, we have helped thousands of consumers fight back against errors by consumer reporting agencies, including ChexSystems. We can review the circumstances of your situation, provide legal guidance, and file a lawsuit on your behalf if appropriate.

Notably, the Fair Credit Reporting Act (FCRA) gives you the right to dispute errors, pursue a lawsuit against the CRA responsible for reporting those errors or failing to correct them, and have your legal costs and fees paid for by the company that harmed you when you win.

Contact Us Today!

Consumer Attorneys is a nationwide law firm with a team of top-tier consumer protection lawyers. We offer free consultations to discuss your wrongful credit reporting situation, and our costs and fees are paid by the companies held legally liable for violating the FCRA.

You can reach us via phone +1 877-615-1725, email info@consumerattorneys.com, LIVE CHAT, or fill out our online intake form.

We look forward to helping you!

Frequently Asked Questions

  • How can I clear my ChexSystems report?

    The only way to clear your ChexSystems report is to dispute any errors that you find and file a lawsuit if necessary. Accurate information generally cannot be removed. Some people advise that you may be able to clear certain items from your report by paying outstanding balances, but this suggestion is not necessarily helpful. For instance, if you have a delinquent balance on an account that has gone into overdraft, you can repay the remaining sum with the expectation that the bank or credit union will update the account status with ChexSystems. However, paying off a balance does not necessarily clear the adverse information from the five-year record reported by ChexSystems.

  • Can you dispute ChexSystems?

    Yes, you can file a dispute for any inaccurate, misleading, or false information in your ChexSystems credit report. ChexSystems offers several methods for filing a dispute, including online or via phone or mail. However, we recommend discussing your situation with a lawyer prior to filing a dispute because not all wrongful reporting scenarios require a dispute prior to filing a lawsuit. If you opt to go forward with a dispute, we recommend doing so via certified mail to avoid potentially waiving any legal rights. (See above for more details.)

  • How to know if I am in ChexSystems?

    Everyone is essentially in ChexSystems. In other words, anyone can request a consumer disclosure report from ChexSystems. However, not everyone has reportable information. So, for instance, if you have no instances of adverse banking activities, then your report would indicate there is nothing to report. If you have instances of adverse banking activities, then your report would indicate each reportable item within the last five years. If you applied for and were denied a banking opportunity based on a ChexSystems credit report, you have a right to review the report and to know which specific information was disqualifying.

 
Previous article Next article
Articles Practice Areas
NO FEE UNLESS WE WIN
Request your free case evaluation now

I acknowledge that submitting this request form does not create an attorney-client relationship and authorize an attorney to contact me.
Get a Free Consultation
Contact Us
8245 N. 85th Way Scottsdale,
AZ 85258