Secret #1: ChexSystems is Overrated
It used to be that everyone wrote checks for everything. Check writing and cashing was a big deal. ChexSystems came into existence in the world of "checks for everything", but now lives in the world of debt cards, electronic transfers, and direct deposit. What does this mean for you and Chexsystems? It means that it is not as important as it used to be. Banks have turned NSF into a profit center by offering "overdraft lines of credit" (overdraft protection), which is basically a loan from the bank with a really high interest rate. This means that instead of getting reported to ChexSystems for "non-sufficient funds", you simply dip into your overdraft line of credit.
There are more factors that contribute to overrated-ness of ChexSystems. Think about things like…
– Online banking and more immediate access to balances, coupled with things like "balance alerts" and similar tools that are now being offered by many banks mean that less people will mess up with overdrafts or bounced checks
– ChexSystems has nothing to do with your credit score. You can do many (if not most things) with a credit card that you can do with a checking account, such as pay bills online and even write paper checks in rare instances when you need to. Why did you need ChexSystems again?
Secret #2: Some Banks Don’t Use ChexSystems, and You Don’t Have To Either!
There are "virtual" and online banks, as well as "bank alternatives" like Paypal that do not use ChexSystems and that your ChexSystems report will not affect.
Why not use one of those?
Sure, it might take some adjustment to your way of doing things, but it’s fairly easy and many, MANY people are already using these online banks and "alternatives", not because they have to, but because they WANT to!
There is a lot to be said for services like those offered by ING Direct and Paypal. Don’t rule them out as a viable alternative to a traditional bank temporarily, or even permanently.
Secret #3: Banks That DO Use ChexSystems May Not Use it As Much As You Think!
Here’s something that may surprise you: many ‘main stream’ banks WILL give you a checking account even if you have been reported to ChexSystems.
Some banks offer what is called "second chance checking accounts". They may have more fees or limitations associated with them (such as limits on check writing), but they are still checking accounts.
The other thing to understand is that because of the "negative only" reporting policies of ChexSystems, banks have caught considerable flack over ChexSystems-related account denials. This has resulted in the relaxing of some of the standards for consumers who have been reported to ChexSystems.
Some banks don’t consider history over a year or two, others don’t deny over ChexSystems items unless they are "serious" items related to fraud. Others yet may not count the negative marks that appear to be "isolated incidents."
This means that even banks that do use and report to ChexSystems may still give you a checking account if you have negative information on your ChexSystems file. To find out, it’s best to apply in person, be up front about your ChexSystems file, and "just ask" the bank representative what your options are.
When all else fails, remember that you can dispute with ChexSystems just like you can with any credit bureau. ChexSystems is a smaller bureau and in some respects this could give you better chances of success with your disputes. The reality of the ChexSystems situation is that even if you can’t get your ChexSystems file clean, you have a pretty good chance of getting along just fine without them, as we hope we’ve demonstrated clearly enough in the paragraphs above.