Checking Accounts with No Chexsystems in Place
If you have recently applied for a new checking account and you ended up being rejected, you might already be aware of the significance of Chexsystems. In fact, this the primary reason why your application has been refused by the bank.
What is Chexsystems?
Chexsystems is a database which is being used by banks and other financial institutions in order to have them alerted about the potential risk which might be posed by an applicant. This is not like the FICO scoring system, in which there is a numerical rating to reflect an individual’s credit score. The Chexsystems does not allow any possibility for you to explain. Once your name has been included in the database, it is almost automatic that your checking account application will be rejected.
Being Included in the Chexsystems Database
There are different reasons on why it would be possible for your name to be included in this risk-assessment database, including the following:
- You have been a bank risk before.
- You have been suspected or have committed bank or checking fraud in the past.
- There is still an overdraft which you owe from a bank.
From the reasons which were stipulated above, it is obvious that your FICO or credit score is not included. This is reflective of the fact that your credit score does not have any bearing for being on the Chexsystems. So if you have poor credit score, you can let it go as it would not show any effect on your application for a checking account or on being included in the Chexsystems. The two risk assessment tools are very different from each other.
Your Best Alternative: Second Chance Checking
If in the past you have been rejected with your application for a checking account, it is about time that you narrow down your search specifically for second chance checking banks. These are the banks which do not refer to Chexsystems to check for the risk which might be present on their applicants.
Below are 4 things which should be noted if you are looking for checking accounts with no Chexsystems in place:
- Create a list of banks that are known as second chance checking banks. These banks are often advertised as “non-Chexsystems banks” or “second chance banking.
- For convenience, make sure that the bank you choose have sufficient number of ATMs all around the country, or at least on the area at which you live.
- Pick a bank which is FDIC-insured.
- Use your gut feeling when making a decision on which bank to choose.