Sunday, November 22, 2009

ChexSystems Questions and Answers (Q&A) Session 3

There are so many questions asked when it comes to chexsystems.Of course people are afraid of it since chexsystems makes you trouble since you can't
What ChexSystems Does
ChexSystems simply keeps records about people who have “abused” or mismanaged a deposit account. In other words, they have a list of people who bounce checks or owe a bank some money.

If you bounce checks, your bank may report you and your activity to ChexSystems. ChexSystems then shares that information with other institutions that ask about you. It’s kind of like an agreement among the banks to help each other avoid risky customers.

Any negative reports are kept on file for 5 years. After that time, ChexSystems removes the report. In addition, a reporting bank can ask ChexSystems to remove a negative report.

ChexSystems also offers some additional identity verification services to banks, but the meat-and-potatoes is the risk reporting.

What ChexSystems Does Not Do
ChexSystems does not decide whether or not you should be allowed to have a bank account. They simply tell an inquiring bank what they know, and the bank makes the decisions.

In addition, ChexSystems doesn’t have a complete history on everybody. First, ChexSystems only keeps records of negative items. Contrast this to a credit bureau that also keeps records of well maintained debts. Another way to look at this: if you’ve got a credit history it generally helps; if you’ve got a ChexSystems history it hurts you.

ChexSystems is only as good as the information it receives. If a bank fails to report a mismanaged account, ChexSystems will never know. Likewise, ChexSystems may have erroneous information that the consumer needs to correct