Friday, September 23, 2011

ChexSystems Mini Course - Day One

Today's Topic: What is ChexSystems?

Put simply, ChexSystems is a "Credit Reporting Agency".

ChexSystems is sometimes referred to as the "fourth credit bureau". You are probably familiar with the big three credit bureaus (Experian, Equifax and Trans Union) -- they are the companies that provide the data that makes up your credit score. ChexSystems doesn't provide a credit score. Instead, they provide data and information to banks so that banks can make better decisions about who they should allow to open new bank accounts. Banks lose billions of dollars each year due to check fraud. That's why they rely on data from ChexSystems to try to identify people who have committed check fraud or had bad banking relationships in the past. The theory is that by using data from ChexSystems, banks and credit unions will avoid opening accounts for people who are likely to commit check fraud or create losses for the bank.

Most banks and credit unions use ChexSystems data to screen customers before opening new accounts. Some sources estimate that 80-90% of the banks and credit unions in the U.S.use ChexSystems data. So, if you are on their list, your choice of banks is severely limited.

ChexSystems simply reports information about you to the banks. They don't "deny" you for a checking account -- the banks are the ones who decide how to use information in your ChexSystems record to let you open (or not let you open) a checking account. The key, as we will discuss in the next few days, is making sure ChexSystems doesn't report ANY bad information about you to the banks.

The "Guide to Get Off ChexSystems" has much more information about ChexSystems and how they operate, and is required reading to figure out how to deal with them. You can still get the Guide (and enjoy our 100% guarantee!) by ordering now.