Can't get a Bank Account — A bank account is something most Americans just take for granted. It's something most of us have had since we were teenagers. But, for some 20 million plus Americans, its just not that simple. For a variety of reasons, millions of Americans cannot get a simple checking account. One reason is that they are in something called the Chex System.
What is the Chex System? — The Chex System is a consumer reporting agency that provides information to banks and other financial institutions. Most banks use Chex Systems to screen potential customers before opening an account to - theoretically - prevent check fraud. As the financial world gets more sophisticated and secure, personal responsibility becomes even more important.
Why am I on the list? — An individual can get on the Chex Systems list for a variety of reasons including: too many NSF (non-sufficient funds) items, writing bad checks, and having a bank debt, to just name a few. Once you are on the list, it takes five years to get off the list unless you take action. You might also have a problem getting a new bank account if you switch banks frequently, so it is very important to do proper research before opening a new account.
What to do if I am on the list? - There are a variety of
options if you are on the list and find yourself unable to get a checking
account. You can get off the list. It takes some effort, but
it can be done. Another option is to find a bank that does not use
Chex Systems. This takes a bit of research, because approximately
80% of the banks and credit unions use Chex Systems to screen potential
customers.
Where do I get a bank account?
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Your options in this area are somewhat limited until you get the initial
problems resolved. There are a few "second-chance checking"
firms out there that will provide a basic checking account for a fee.
Please be careful with
some of these companies and be sure to do your research. Many of these
companies have products that are similar to checking accounts, but do not
offer ways to deposit physical checks, so you will still have to go the
check cashing store route. They still are a good way to get started
however, and can help in getting back on your financial feet, just make
sure that they provide the services that you really need. Competition
has increased as well over the past couple of years, so shop around and
get the best deal for yourself. Just because you may be in a less-than-ideal
financial situation does not mean you should be taken advantage of.
There are a few check cashing places themselves that offer pretty decent
debit card options should you choose to go that route. They offer
convenience and competitive pricing and can eliminate the check cashing
fee with direct deposit. They also offer credit rebuilding services
such as reporting directly to credit agencies when you use their bill pay
services right from the debit account.
When you do go for a new account, you will probably have better luck applying online. If you are not approved, do not get discouraged. Just keep at it and keep working to get off the Chex System list and get yourself back on your financial feet!
Warnings - Be careful of offers to provide "up-to-date" listings of banks not using the ChexSystem to screen checking or savings account applications. These lists are usually not current at all, and banks are constantly changing their processes to evaluate an applicant. Much of this information is available online, in particular on various personal finance forums specializing in getting help if you are on the ChexSystem. Please save yourself the money!
Once You're Back On Your Financial
Feet - Getting off the ChexSystem is just the first step.
Once you're off it - you want to stay off! Learn as much as you can
about maintaining your financial health. Always keep in the back of
your mind what it was that got you on the system in the first place.
It is very easy to just try and forget about our past embarrassing mistakes,
but that's the best way to repeat them. Learn about proper budgeting,
checking account maintenance, and always know exactly what your bank's monthly
fees are if any. Always know what your bank's overdraft fees are and
what interest you may be required to pay. That way you will know exactly
what you will need to have in your account by the end of the month to stay
in the black.
More Information
- Below are links to a variety of articles with more information
on what to do if you find yourself on the Chex Systems and need to know
what to do now, or you just want more information. The important thing
is to not wait, but act today to get yourself back on your financial feet!
Educate Yourself - Education is your best tool to maintaining good financial health! Learn all you can and keep on course! Don't get discouraged if you get rejected for new bank accounts from large banks even after clearing your report up. There are several solutions to getting back on your feet, so keep at it and you too will get on with your financial life. Just keep on your budget and keep a careful track of the checks you write, online payments you make, and debit card purchases and withdrawals to prevent this from happening again. Be honest with yourself about how you got into this situation to begin with, and keep on track to keep it from happening again!