Bouncing a check or 2 is expensive but will not hurt you badly until you don't cover
the overdraft amount in your account. This will result in your name being added
to one of 2 databases used by almost all banks:
Chex Systems and/or Telecheck.
These 2 companies are to bank accounts what the 3 credit-bureaus are to credit cards. Get your name on the bad list and you'll find opening a bank account nearly impossible, until recently, and your current bank may even close your account if they get wind of your financial problems.
Banks rely on ChexSystems primarily to help them screen applicants for new accounts, especially checking accounts. Checking accounts don't generate much money for banks; many offer them free in hopes of enticing you to invest in more lucrative products.
Since past account problems are considered a key predictor of potential risk, many (though not all) member banks will deny an account based on a ChexSystems report.
In these scenarios, the customer frequently considers ChexSystems the bad guy even though it has nothing to do with any decision a financial institution might make based on information in its database.
-How long does a
Chex Systems report stay on file?
How do I get it deleted? Each report submitted to ChexSystems remains in their files for five years, unless the bank or credit union that filed the report requests its removal or ChexSystems becomes obligated to remove it under applicable law.
If you've been denied an account
from a bank or credit union and ChexSystems was used in the decision, you can obtain a free copy from them here.
Consumers can now use use non-ChexSystems banks to obtain a bank account regardless of past problems with previous banks. These are called second chance bank accounts.
A little less than 50% of the people that are reported to ChexSystems, use non-ChexSystems banks to overcome their problem. Over 50% of them resort to opening up an untraditional bank account often called "second chance bank accounts"; usually a checkless bank account connected to a debit card.
Although, these types of accounts are initially checkless, they do provide all the benefits of a regular checking account including bank routing number, account number, and debit card. There are some that will provide checks, though.
It offers individuals a brand new start and new responsibility. Just like cleaning up a bad credit report, you must take care of your banking issues also.
Having a bank account provides us a safe and convenient means to save money and earn interest on our savings and checking accounts. Second chance bank accounts are ideal for individuals who are unable to get a traditional savings or checking account. It's one of the best solutions when your name has been added to Chex Systems or Telecheck.
There really are very few guidelines to opening a second chance bank account. A very low minimum amount is required to open this type of account, which follows the same rules of the mainstream banking industry. And one of the fortes of a second chance bank account is that no credit check is required. Individuals with bad credit and/or bad banking history are approved.
