If there's one report in the financial world you definitely don't want your name on, it's ChexSystems. Utilized by U.S. Banks and credit unions as a way to determine if potential customers are too great of a risk to simply hold a checking account, ChexSystems is essentially a database that tracks when banks close customers' accounts for "cause". Such reasons might include closure due to multiple overdrafts, non payment of fees, or providing false information when opening the account.
Here's how it works. The banks report account closures and their reasons to ChexSystems, which manages and monitors the information in a central location, and then shares it with other member banks at their request. In addition, each incident can remain on your CheckSystems report for a total of five years from the date it was reported by the bank. Therefore, it can make if very difficult, if not impossible, to open another checking account at a new bank for quite some time.
Just like your regular credit reports, you're also entitled to a free report from ChexSystems each year. If you're curious, visit ChexSystems to request your free report.
