Chex System

Chex Systems 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". Chex Systems 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 Chex Systems 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 Chex Systems, 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 Chex Systems 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 Chex Systems data. So, if you are on their list, your choices of banks is severely limited.

One of the complaints people have about Chex Systems is that you don't know you are on their list until you run into a problem (like being refused a bank account)! Some people even have their current bank accounts closed by one bank if another bank reports them to Chex Systems. With Chex Systems, you are guilty until proven innocent. Unfortunately, Chex Systems, like all credit reporting agencies or companies that try to keep track of millions of pieces of data, can make mistakes. The problem is that a mistake on your Chex Systems report can have serious consequences for you. So, if you find out that you are on the Chex Systems list, don't assume that their information is correct.

Luckily, if there is an error in your Chex Systems report, you can fix it. The Fair Credit Reporting Act ("FCRA") is a U.S. Law that governs credit reporting agencies like Chex Systems. The FCRA requires that Chex System fix errors in your record. In fact, the FCRA provides a number of ways for you to fix errors, and also provides that you can sue a credit reporting agency that doesn't fix errors in your record (and you can win damages if you sue and win). The challenge for you, if you have an error on your Chex Systems report, is to identify the error and clearly and accurately communicate the error to Chex Systems in a way that requires Chex Systems to fix the error. You can find tips on how to fix your Chex Systems report and also get information on how to find a bank that doesn't use Chex Systems. Remember, you are not alone, there are millions of people in the same situation as you. The question is, will you take steps to fix your situation?