According to the latest available statistics, ChexSystems is doing business with roughly 80% of the banks and credit unions out there. Maybe we’re different, but while most people tend to focus on the 80% figure, we tend to see things the other way around. And the other way around is simply that there are about 20% of the banks and credit unions out there that don’t use ChexSystems. If you stop and think about it, that’s quite a lot of banks! Now we’re not going to lie to you and tell you that those non-ChexSystems banks are popping up in every corner, but if we tell you that there’s a good chance that there are a few in your area, we won’t be lying to you either.

You know the deal: sometimes there’s a company out there that ventures off the beaten path, in order to give its customers a chance at something they really need. In other words, the company takes a risk, in order to make some money by serving a neglected portion of the population. So it is with banks that offer checking accounts for people with bad credit. Because the vast majority of banks out there use ChexSystems to determine whether or not they will open a checking account for a new customer, people with a negative record are left out in the cold.

While it might have been easy to turn away people when times were good, things are different now. The economic crisis means that a lot of people have fallen on hard times and have ended up with negative marks on their ChexSystems record. That doesn’t necessarily mean that they wouldn’t be good customers for the banks and/or credit unions. So those financial institutions have started to try and look beyond this simple aspect. There are now some that simply don’t check your ChexSystems record. Some others do, but also look at other financial information before they make their decision. What that means is that banks do openchecking accounts for people with bad credit, so you can still get a second chance checking account and be able to benefit from banking services.

Related: How to open a bank account after bankruptcy

Now it’s important to point out that all banks are definitely not created equal. If you’re going to open afresh start checking account a non-ChexSystems bank, there’s a few things you need to make sure are kosher, because all it takes is for you to fall on one bad apple, and you’re pretty much screwed. Here’s how to find a “bank without ChexSystems”

Finding Good Banks That Do Not Use Chexsystems

1. The most important part of finding a non-ChexSystems bank is, of course, doing your homework to make sure that the bank(s) you’re considering giving your business to are INDEED not going to run your ChexSystems report. Sometimes, and especially when they’re in a situation where they’re opening a lot of accounts in a short period of time, they will open up the account, pending verification. After running the scan, and they find negative marks on your report, your account will be closed. Period. Or, (and that’s even more embarrassing), if the bank checks on the spot, you will be declined in public! So make sure you have your facts right.
2. The second most important thing is that, just because you’re looking for a bank that doesn’t run your ChexSystems report doesn’t mean that you should settle for just ANY bank that you find. You still need the protection that comes with that financial institution being FDIC insured. So you need to have proof that the bank is FDIC insured before you open that checking account. In the case of credit unions, they have to be NCUA insured (that’s the equivalent of FDIC insurance, but for credit unions).
3. Finally, make sure that you’re not going to get some crippled service. If you can’t get the same (or almost the same) level of convenience, then it kinda defeats the purpose to go to such great lengths. You will need to get at least the following: check writing privileges, Visa- or Mastercard-branded debit card, and online banking. Also take a good look at their fee structure, in order to make sure that you’re not getting nickel-and-dimed.

Being reported to ChexSystems doesn’t necessarily have to mean that your financial life becomes a living hell. As previously stated, there are many financial institutions (banks and credit unions alike) that will open asecond chance checking account in your area for you regardless of, or in spite of, your ChexSystems profile. All you need is to do your homework and find the reliable ones that will fit you best.

© “Banks Without Chex Systems” | How To Find A Good Second Chance Bank

One of the reasons why I started this website is that I have been meeting with a lot of people who insist that being able to open a checking account once you’ve been reported to Chexsystems is the closest thing there is to mission impossible, whether it be finding a local non-Chexsystems bank or an online bank that doesn’t use the Chexsystems reporting information to open new checking accounts. It’s easy to understand why so many people people would believe that, since the “big” banks typically will not do business with you once you’ve been reported. You’re left with the only option of looking for other, smaller banks, and the information is not readily available. And let’s not forget scammers who will try and sell you outdated lists, that will do nothing to help you in your predicament.

It certainly is frustrating to look for weeks and weeks and just keep getting turned down, so at that point you start thinking that you’re probably fighting a losing battle. You think that you may just have to deal with it and settle for those awkward “solutions” that are touted as alternatives for people who can’t open checking accounts because of Chexsystems. To be totally honest, finding a non-Chexsystems bank is not the easiest thing, but with some useful information in hand, you can already start narrowing down your search and be more productive. In order to improve your chances of success when negotiating with banks, order your chexsystems report to see what information is in it and try and resolve any issues first. You might also want to learn about the ChexSystems report dispute process.

The first thing you need to know is that you should definitely not expect any bank to openly advertise which reporting system they use (if any). If they did, they would be just opening a can of worms. They would be swamped with new people who want to open checking accounts, but they would have to sit there and sort through hundreds, if not thousands, of applications to handpick the ones that look promising. It’s just not cost-effective. What you can do, though, is take your yellow pages and start calling and asking. The trick here is to ask for the branch manager or someone in the branch who ranks high enough to give you the information that you’re looking for. Also, if you can, try to sweeten the deal. If you have a little bit of savings that you an open a CD with, mention it. Stuff like that will make you look more appealing as a customer and they’ll probably be more inclined to cut you a deal.

Of course, whichever banks that do not use Chexsystems that you find in your search, and that you’re considering opening second chance checking accounts in, absolutely has to be an FDIC-insured bank. There’s simply no way around that. If you fail to take this precaution, and the bank happens to go under, you will lose all the money that you deposited there. On the other hand, with an FDIC-insured bank, your money is insured up to $250,000 per account holder. Not a bad safety net.

In your search to open a non-Chexsystems checking account, you have to be on the lookout. You will find a lot of information out there and what we recommend is that you gather as much of it as you can. The trick is to avoid getting scammed for large amounts of money. If you find something that looks promising and is reasonably priced, check to see if you can get a money-back guarantee. This will typically protect you. Also, look around, check online banks (like Ally) if brick and mortar ones keep turning you down. Explore every free option before eventually turning to paid ones.

As a final word of advice, when you’re looking for advertisements, favor specific institutions over list sellers. The reason is that if an institution is advertising to people with bad credit or who have been reported to Chexsystems, it’s probably because at that specific moment, they probably have some kind of product or service that caters to this specific niche. Once they decide not to deal with this segment anymore, they will just stop advertising. A list, on the other hand, would have to be continuously updated to account for companies that enter the segment, as well as those leaving it. We’re not saying that it’s not possible to find a good, legitimate list. What we’re saying is that you’ll probably have better luck with the companies that advertise to you than you will with the list sellers.

Finding A Second Chance Checking Account In Your Local Area

If you’ve never had trouble opening a checking account, then odds are you have no idea what ChexSystems is. On the other hand, if you’ve been trying to open a bank account and find yourself unable to do so, it’s likely that it’s because of Chexsystems. ChexSystems was initially developed to detect fraudulent activity and assist financial institutions with risk management analysis, particularly for individual customers. Banks that do not use Chexsystems are not impossible to find, although the company is pretty aggressive marketing-wise and its goal is to have 100% of the banks using its services.

Much like your credit score monitors the way you manage your credit and documents your credit history, Chexsystems monitors your banking activities and documents your banking history. Besides being a credit reporting agency, it’s also a licensed debt collector. From the reporting agency standpoint, though, just like you can request one credit report per year from each of the major credit reporting companies, you’re also entitles to a ChexSystems report, once a year, at no cost.

Related: Disputing mistakes on your ChexSystems report

Here’s what a sample ChexSystems Consumer Report looks like.

September 29, 2003

JOHN C CONSUMER

123 MAIN ST

ANY TOWN MN 12345

ChexSystems will reinvestigate any item listed in your consumer report that you believe may be inaccurate or incomplete. In order for a reinvestigation to be initiated, please complete the enclosed form and mail it to the address listed above in our letterhead or by fax to 602-659-2197.

This report was prepared for JOHN C CONSUMER

Consumer ID:12345678 for JOHN C CONSUMER

Please provide your Consumer ID number, along with your Social Security number in any future contact with ChexSystems.

Reported Information Reported Information refers to reports of accounts that have been mishandled, reported for cause, and/or outstanding debts. Reported Information is submitted directly to ChexSystems by members of our service, which consists mainly of financial institutions. Our current practice is to retain this information for a period of five years. SSN/ID indicates a Social Security number, Individual Taxpayer Identification number, Tax ID number, or Employer ID number.

Source Of Information: First National Bank Any Town, MN Reported Name: John C Consumer Reported Address: 123 Main St Any Town, MN 12345 Reported SSN/ID: 999-99-9999 Drivers License: X123456789123 State: MN Joint Name: Mary M Consumer RTN: 123456789 Account#: 987654321 Date Reported: 01/01/2003 Reported For: Non-Sufficient Funds (NSF) Activity Debt Reported: ChexSystems has no debt information available. May we suggest that you contact the source of the information to determine whether or not a debt is owed. Source of Information: Any Town Credit Union Any Town, MN Reported Name: John C Consumer Reported Address: 123 Main St Any Town, MN 12345 Reported SSN/ID: 999-99-9999 Drivers License: X123456789123 State: MN RTN: 123456789 Account #: 987654321 Date Reported: 01/01/2003 Reported For: Transactions Involving Returned Items From Own Account At another Financial Institution. Debt Reported: 160.23 Source of Information: First National Bank   Any Town, TX Reported Name: John C Consumer Reported Address: 123 Main St  Any Town, TX 12345 Reported SSN/ID: 999-99-9999 Drivers License: 123456789 State: MN Joint Name: Mary M Consumer RTN: 123456789 Account #:    987654321 Date Reported: 01/01/2003 Reported For: Non-Sufficient Funds (NSF) Activity Original Charge Off Amount:         $100.00 Paid In Full/Settled In Full Date:    09/14/2000

Inquiries Initiated By Consumer Action

Inquiries Initiated By Consumer Action refers to inquiries resulting from a transaction initiated by you. These include applying for a credit card or completing an application at a financial institution. Please note that the inquiries are part of your credit history and may be included in our reports to others. These inquiries can be viewed for ninety days up to three years.

Inquirer Name:	Any Town Savings
Inquirer Location:	Any Town MN
Inquiry Date:	02/28/2003
Name Provided:	John C Consumer
SSN/ID Provided:	999-99-9999

Inquiries Not Initiated By Consumer Action

Inquiries Not Initiated By Consumer Action refers to inquiries resulting from transactions you may not have initiated, so you may not recognize the source. Members of our service with a permissible purpose include current creditors, pre-approval creditors, and potential investors trying to assess risks. We report these requests only to you as a record of activities, and we do not include any of these requests on credit reports to others.

Inquirer Name:	Renaissance
Inquirer Location:	Beaverton CO
Inquiry Date:	03/24/2003
Name Provided:	John C Consumer
SSN/ID Provided:	999-99-9999

Retail Information

Retail Information refers to returned checks written on an account and certain collection accounts. Retailers and other businesses report this information to Shared Check Authorization Network (SCAN). ChexSystems receives this information directly from SCAN and is not involved in the collection of these items.

For additional information you may contact SCAN by telephone at 800-262-7771 or in writing to SCAN, Attention Research & Resolution, 7805 Hudson Road, Suite 100, Woodbury, MN 55125.

Date Of Check:	01/10/2002
Check Number:	6011
Amount Of Check:	$106.50
Date Check Paid:	Not Paid Yet
RTN/Account #:	12345678/98765543454
Drivers License:	X123456789123	State:	MN
Payee:	ABC Merchant
Date Of Check:	02/11/2003
Check Number:	7025
Amount Of Check:	$513.00
Date Check Paid:	08/23/2003
RTN/Account #:	12345678/98765543454
Drivers License:	X123456789123	State:	MN
Payee:	XYZ Stores

History Of Checks Ordered

History of Checks Ordered refers to a record of check orders placed within the past three years.

RTN/Account Number:	12345678 / 98765543454
Quantity Ordered:	400
Check Start Number:	6060
Date Order Shipped:	03/03/2002

Social Security Number Validation

Social Security Number Validation indicates the year and state that a particular sequence of digits first became available for issuance. This information does not include the name of the individual to whom the number was issued.

999-99-9999 Became available for issuance in 1951 or before inthe state of MN.

Drivers License Number Validation indicates whether or not the format of the drivers license number provided matches the requirements set by the state of issuance.

Drivers License X 123456789123 is a valid format for the stateof Minnesota.

Drivers License Number Verification is information provided to ChexSystems by the state that issued the drivers license number. This information, which is limited to certain states, identifies the name and date of birth of the individual to whom the drivers license was issued.

Drivers License: X123456789123	State: MN
Issued To: John C Consumer
Date of Birth: 01/31/1978

ChexSystems Contact Information

If you have any questions, please contact us at the address or telephone number listed
above in our letterhead or by fax at 602-659-2197.

As you can see, this is a very thorough report. It has drawn criticism because of that. One of the major points is that unlike other credit reports that contain both positive and negative information, a Chexsystems report contains only negative information. This is certainly true, and in response to that, some changes were brought to the way the information was reported and the weight assigned to some entries.

Yet this doesn’t change the fact that being reported to ChexSystems is decidedly not a good thing to happen to you; actually it’s something you should look to avoid at all costs. Otherwise a ChexSystems Consumer Report much like the one on this sample will be there to remind all banks that they shouldn’t be opening checking accounts for you.

© Sample ChexSystems Consumer Report