I Understand FICO But What The Heck Is ChexSystems?
Wednesday, August 19, 2009, 5:16 AM | Leave Comment
When you go to your neighborhood bank to open an account, most probably you would be accepted and you would open that account. There are folks who are unfortunately rejected. How does a bank decide whom to accept and whom to reject? Well! the bank asks for the services of the national account verification company called ChexSystems. It carries a huge database on individuals banking practices.
ChexSystems helps banks screen out applicants who have mishandled bank accounts in the past. If you ever overdrew your checking account and then abandoned it while you still had a negative balance, your name might be included in ChexSystems’ database.
Federal law states that ChexSystems should be considered a “specialty credit reporting bureau” and must comply with the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC).
Reports about individuals remain on file for five years, unless the bank or credit union that filed the report removes it sooner. The decision to delete a report is up to the bank or credit union that provided the information.
In a Nutshell
Just like a free credit report, you have the right to one free copy of your ChexSystems report each year. Call 1-800-428-9623 or chexhelp for a free report. Obtain a report if you have been denied a bank account or if you are a victim of bank fraud.
An example of bank fraud is when someone steals your checks and forges your signature in order to use them. Read the instructions on the Chexsystems report for disputing inaccurate information. The company must investigate your claim and notify you of the results within 30 days.
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