Have you bounced checks or made overdrafts in the past? Have you ever had a problem opening a new bank account? It may be a result of your previous bank logging a complaint with a company called ChexSystems (consumerdebit.com). ChexSystems is used by the majority of banks and credit unions as a part of the account opening process (either for checkings, savings, or business accounts). ChexSystems in very simple terms reports on your banking history much like TransUnion, Equifax, and Experian do for your credit history.

ChexSystems is used as a repository by banks and credit unions to understand the profile of someone who may be trying to open a new account at their institution. If you have a history of bounced checks or overdrafts the bank or credit union may deny your application for a new account based on this ChexSystems report. ChexSystems was considered a credit reporting agency in 1999, and is now regulated under the Fair Credit Reporting Act. As a result consumers are now allowed one free ChexSystems report. This report will let you see what the banks and credit unions are seeing, and give you the ability to see if the items on the report are fair. If there are items on the report that are wrong then you can file a dispute letter with ChexSystems.

If the report is truthful and you have a poor banking history (meaning bounced checks and overdrafts) than all you can do is wait. The negative items take five years to clear on your ChexSystems report. In the meantime there are banks and credit unions that will not deny you based on negative items in your ChexSystems report, to find them go to this link (http://chexsys.tripod.com/goodbanks.html).

The important thing to remember is that how you bank does leave a history, and that history can hurt your ability to open new accounts at a later date, especially if you have bounced checks and overdrafted your accounts. The best thing to do is to always remember to keep enough of a buffer (if you can) in your account so that you are protected from overdrafts and bounced checks.