Are you a Los Angeles resident who’s trying to open a bank account but is unable to because you’ve been reported to ChexSystems? Well depending on what your requirements would be, and your specific situation, there are several options that are available to you.

Did you get reported to ChexSystems because of fraud?

If that’s the case, then you will have a very hard time finding a bank that will agree to do business with you. Even some of the prepaid debit cards may decline your application.

Did you get reported by mistake?

Learn how to dispute a ChexSystems report.

Did you get reported to ChexSystems because of unpaid overdrafts?

If you have an overdraft that you haven’t paid for, the bank will close your account and send your information to ChexSystems.If you find yourself unable to open new accounts because of this, you need to go to the bank that reported you in the first place; they’re the only way for you to get out of ChexSystems. Explain what happened and offer to pay for what you owe, but in exchange they must agree IN WRITING to write ChexSystems and ask that your name be removed. It’s very important that you get their agreement in writing because they may not follow up.

If you paid the overdraft  and are waiting for your name to be cleared on ChexSystems’ database, you can ask the bank for proof that your debt is paid off. Some banks will agree to open an account for you even if your name is showing on ChexSystems, as long as you can prove that you don’t owe money to another bank.

How long has it been since you were reported?

Your information stays on file for five years. If it’s been four years and you only have one year to go, maybe it’s best that you wait it out.

What are my checking account alternatives in Los Angeles?

If all else fails, you can use a prepaid debit card as a checking account alternative. There are many of them that will give you most of the features you would get with a regular checking account: Western Union, Ace Elite, Rush Card, Walmart MoneyCard, Amex Prepaid, and so on.

Why can’t we give a list of L.A. banks that don’t use ChexSystems?

The first reason is that, from a logistical point of view, that would be a nightmare. Banks change their policies all the time and the sheer number of them would make such a list so hard to maintain that there’s no way it could be priced in a way that makes sense for both the customers and the people that make it. Lists that you see marketed online are just bogus lists copied from Yellow Pages and other sources and pasted.

The second reason is that many banks may actually open bank accounts for people on ChexSystems but would rather not advertise it, because it’s something they do on a person to person basis, and they don’t want it to get out of hand. With the number of people in financial trouble, non Chexsystems banks are in high demand these days.

Non ChexSystems Banks In Los Angeles | LA Second Chance Checking Accounts

While we would love to be able to give a clear-cut answer to that question, it’s actually not a black or white type of situation. There all different circumstances that can come into play and influence the outcome, depending on your personal financial picture. Let’s take a look at each possible answer.

First answer: NO

This one, although the least popular answer, is probably the most likely one. In most cases, the person doesn’t find out that they can’t open a checking account until they’ve actually been to a branch to do so, and were declined. The majority of banks in the United States use a database called ChexSystems to screen prospective clients. If your name shows up on that database, that means that a bank has had a negative experience with you and has reported your name to ChexSystems. The particular case we’re looking at, unpaid debt, is definitely one that can get a bank to report you.

As for how long your information stays on Chexsystems, well unless corrective action is taken, that info stays there for five years, after which it is purged. In that time frame, it gets very hard to open new checking accounts, because an estimated 80 percent of the banks use Chexsystems and will turn down your business if you’re on that list.

Second answer: IT DEPENDS

Some banks, known as non chexsystems banks, do use ChexSystems but don’t automatically turn you down if you’re on that list. They tend to be the smaller and/or regional banks. You may have to jump through a few hoops but they will hear you out before making a decision. There are about 20% of banks out there who are more flexible when it comes to that, so you might have to look at your neighborhood banks. Establishing a personal relationship also works better in those smaller institutions.

Third Answer : YES (with caveats)

If you have no other options, your best bet might be to get a prepaid debit card. Of course, it’s not an ideal setup, because most of them will cost you way more than a regular checking account ever would, but at least they will give you almost all the convenience that you would get. Standard free features include direct deposit of your paycheck online bill pay, and the ability to manage your prepaid card online. As for the other stuff, that’s where you will need to comparison shop. There are a lot of fees to keep track of: annual (or monthly) fee, transaction fee (pin or signature), ATM withdrawal fee, reloading fee, inactivity fee, setup fee…

Not every card has ALL those fees, but they all charge you different combinations of fees, so it pays to know exactly what you’re going to be using the card for, and see which offering best matches your personal circumstances. If push comes to shove, a prepaid debit card might be the closest thing to a bank account that you can get.

Can I Open A Bank Account If I Owe Another Bank Money?

J.P. Morgan Chase is one of the largest banks in the country. Chexsystems is the banking system’s database of all the people that they don’t want to have as customers. As a company, Chexsystems is pretty aggressive in their marketing, and it’s estimated that they serve between 80 and 90 percent of the banks out there. When you put all those things together, the answer is pretty clear: yes, Chase does use Chexsystems. Actually it would be surprising if they didn’t.

Now the big question mark is how flexible they are with it. Unfortunately that is something that we cannot answer right now. What we can tell you is that Chexsystems in and of itself has no influence on whether or not your new checking account application is accepted or denied. That decision rests entirely with the bank. So if, for whatever reason, you can make your case and prove that you either did get off Chexsystems’ list or otherwise solved your issue with them, then you should definitely try and see what you can get.

Does Chase Use Chexsystems?

The banking industry relies on a few companies to do its risk management, the most well-known of which is ChexSystems. This company keeps a record of past blemishes in your banking history and if you were to go open a bank account, this information is available to the participating banks and credit unions and will likely result in them refusing to open an account for you. Fresh start checking accounts can be opened, but of course they comes at a certain cost.

Bad Credit’s Impact On Your Banking Options

Now what a lot of people overlook is the fact that a bad credit history is also one of the factors that can put you in a situation where you can’t open a bank account. It’s obvious that being rejected for a bank account is not a pleasant experience, but when the basis of your rejection is bad credit, it’s sort of frustrating. In all honesty, opening a checking account has no connection whatsoever with your credit. But many banks have decided that having bad credit makes you ineligible for a checking account. A bad credit history should not affect your ability to open a checking account, although it does make sense that it would block you from having access to some bank account options like overdraft, personal line of credit, and so on…

Why Banks Turn Down People With Bad Credit

They base their position on the assumption that you will be a poor customer. They expect that you will overdraw your account because you don’t have enough money to pay your bills (as evidenced by your poor bill-paying history on your credit report). Returning your checks will generate fees on your account, which you may not be able to pay. Paying them will overdraw your account and you may not be able to pay back. Either way, they might have to end up closing the account and reporting you to ChexSystems, so they’d rather not open the account to begin with. In the end, many people with bad credit can’t open checking accounts, and that’s not a good position to be in.

Banks That Do Not Use ChexSystems For People With Poor Credit

If you have poor credit and need to have access to a checking account, you need to find those banks that offer second chance checking accounts, also known as fresh start checking accounts. They usually come with their own set of restrictions (you can’t overdraft the accounts and have limited check writing privileges) and costs (minimum opening balance, minimum balance, monthly fee), but it’s such a wide and largely untapped market that competition is picking up. Which means that you can find a bad credit checking account with check writing, no minimum balance, and a reasonable monthly fee of around $5.

Your best bet is to look online. This is such an ever-changing field that no list could realistically be kept 100% accurate. But whatever you decide to do, use the internet to do some comparison shopping, so that you can get a poor credit checking account that works best for you.

Related Resources: Bad Credit Low Income Loans - Build credit with secured credit cards

© Checking Accounts For People With Bad Credit

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