Some people think getting reported to ChexSystems means they're out of luck when it comes to banking for the next few years. Being reported to ChexSystems isn't a death sentence to your finances, though.
What Is ChexSystems?
ChexSystems is a "credit reporting agency" (credit bureau) as defined by the FCRA, and is therefore subject to the FCRA as any credit bureau would be.
The banks that report to ChexSystems are "furnishing" information to a credit bureau when they report to ChexSystems, and these banks are therefore subject to the FCRA under furnisher rules and the rules governing the requesting of consumer reports.
This means that as a consumer you have options for correcting and removing items from your ChexSystems report.
Disputing With ChexSystems
Disputing a ChexSystems entry is not unlike disputing any other entry on your credit report with any other bureau.
You should provide a detailed factual dispute based on actual errors or inaccuracies with each entry.
ChexSystems asks you to use their request for investigation form to submit disputes to them.
However, there is nothing in law that I am aware of that requires you to do so.
Whether you choose to use their form or not, you should be sure to include accompanying documentation and as much as you can in the way of supplemental and factual information.
Why? Because like any credit bureau, ChexSystems is required to forwards ALL RELEVANT INFORMATION regarding your dispute to the furnisher. If they don’t, they are in violation of the law.
Once you have disputed with ChexSystems, wait for a response.
If the item comes back verified even though the dispute was factual, you can follow up with a Method Of Verification request as allowed under the FCRA.
If ChexSystems still fails to comply you can follow up with BBB complaints, FTC complaints, and with the furnisher (the bank who reported you to ChexSystems.)
Furnisher Disputes Relating To Your ChexSystems Report
Even if you’ve reached the point where ChexSystems won’t budge, it still may be possible to get the bank to remove the entry by dealing directly with them.
If you have an incident where the account had been paid in full and it lingers on your report, you can ask the bank to remove it, again, based on factual errors and any incorrect reporting. You can follow up with the bank in the same manner with BBB complaints and similar tactics.
At the very least any paid "incidents" reported on your ChexSystems report should be marked as such. You have a right to ensure that each item on your ChexSystems report is accurate, complete, verifiable, and timely. This means that an incident where the amount owed has been paid but has not been marked as such could be in violation of your rights under the FCRA, and you can dispute (and fight) based on that fact.
Flying Under the Radar
If you are unsuccessful in getting your ChexSystems report cleared, you can still get a checking account.
There are many banks that do not use ChexSystems (though they may be harder to find). To learn how to find one you can read our article on Non-ChexSystems banks.
Also, know that items reported on your ChexSystems report should only stay on for 5 years. 5 years isn’t forever, and as long as you can find a reasonable alternative in the meantime, chances are you’ll be able to continue on with your financial life with little impact from being reported to ChexSystems.