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When you apply for a new bank account, chances are the bank will do their own version of a credit check. They use a system called ChexSystem, developed by Chex Systems, Inc. The ChexSystems report basically tells the bank if you have a history of bouncing checks or leaving your previous banks holding the bag (leaving an outstanding balance). What does this mean to me? What it means to you is simple: if you mishandled your bank accounts in the past, and find yourself in the ChexSystems database, you could find it extremely difficult to open a bank account for quite some time. Basically, during the five years that the negative ChexSystems report stays in the database, you will probably be turned down by most Banks or Financial Institutions.How can I get around it? If you try to search out a bank that does not review your ChexSystems report before opening the account it will be pretty hard to find. This is due to the fact that over 80% U.S. banks and credit unions belong to the ChexSystems network. With check fraud and abuse on the rise, you can expect the number of financial institutions using ChexSystems to rise also.The best approach for you is to stay out of ChexSystems. To do so, avoid writing checks without having money in the account to cover them. Find out from the bank or credit union how long it takes for deposits to be credited to your account. Also, keep track of your balance and reconcile your checkbook with the bank's statement as soon as you receive it, or go online and check it. And, before closing a checking account, make sure all checks have cleared, all automatic debits have stopped and you have paid all fees. If you are reported to ChexSystems, you have options Because locating a non ChexSystems bank is becoming harder and harder. The most reasonable solution is to obtain a debit card that opens a deposit account for you. They will allow you to direct deposit funds you receive and pay bills online or in person without carrying cash, standing in line at check cashing stores or buying money orders. The approval on these cards are 100% guaranteed. Some debit cards are very expensive, others offer few features and are difficult to use. So, it's best to check them out online or by phone. With a debit card, you can have all the benefits of a checking account, without being turned down. Also, you can use the card at ATMs, to pay for purchases, or shop online. This is a valuable solution if you find yourself stuck with a chexSystems report on your record.
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