If you’ve had trouble opening a bank account, there’s a good chance ChexSystems could be involved. ChexSystems is a consumer reporting agency that banks and credit unions use to assess applicants for new accounts. Around 80% of banks in the U.S. rely on ChexSystems data to screen for certain financial behaviors, like overdrafts or unpaid fees.
This agency also assigns each person a ChexSystems Consumer Score. This score, much like a credit score, indicates risk—high scores make you more favorable to banks, while lower scores may lead to account rejections.
In this guide, you’ll learn how ChexSystems scores work, how to request your score, and what steps you can take if your score is holding you back from getting a new bank account.
Factors That Affect Your ChexSystems Score
Several factors can impact your ChexSystems score, often reflecting how you’ve managed previous bank accounts. Understanding these can help you see why your score might be lower than expected and which habits to avoid in the future. Here are some of the key elements that influence ChexSystems scores:
- Overdrafts: Frequent overdrafts or unpaid negative balances in accounts can signal risky behavior to banks, leading to a lower score.
- Unpaid fees: If you’ve accumulated fees on a past account that remain unpaid, these could be reported to ChexSystems, reducing your score.
- Bounced checks: Writing checks without sufficient funds in your account can also hurt your ChexSystems score. This is seen as a potential risk for future banking.
- Account misuse: Activities like excessive withdrawals, suspected fraud, or failing to adhere to bank terms may be reported as misuse. This can flag your profile as higher-risk.
- Closed accounts due to mismanagement: If a bank or credit union has closed your account because of unpaid fees or other issues, this may also show up on your ChexSystems report, impacting your score.
Keeping an eye on these behaviors can help you avoid a negative ChexSystems report and maintain a score that makes it easier to open new bank checking and savings accounts.
What Is a Good ChexSystems Score?
The ChexSystems score ranges from 100 to 899, with higher scores indicating a lower risk of future account closures. Unlike credit scores, ChexSystems doesn’t officially label scores as “good” or “bad.” Instead, it estimates the likelihood that an account might be closed “for cause” within a year.
Each bank interprets ChexSystems scores based on its own risk tolerance, often using “cutoff” segments. For example, a bank with a moderate risk tolerance may approve applicants with scores of 545 or above. Other banks may set their own thresholds based on how much risk they’re willing to accept.
Here’s a general idea of how banks might view different ChexSystems score ranges:
| ChexSystems Score Range | Risk Level | Typical Bank Response |
|---|---|---|
| 700 – 899 | Low Risk | Approval likely |
| 545 – 699 | Moderate Risk | Approval possible, depending on bank |
| 400 – 544 | Higher Risk | Approval unlikely without additional review |
| 100 – 399 | High Risk | Likely to be rejected |
This table offers a general guide—each bank may adjust these cutoffs to match their specific policies.
ChexSystems Score vs. Credit Score: What’s the Difference?
It’s easy to mix up ChexSystems scores and credit scores, since both are numerical ratings related to your financial history. However, they serve very different purposes, and understanding these differences can help you see why banks use ChexSystems specifically for account openings.
Why Banks Look at ChexSystems Scores
While credit scores focus on your history with loans and credit cards, ChexSystems scores evaluate how you’ve handled checking and savings accounts. Banks use ChexSystems scores primarily to assess the risk associated with opening a new checking account for you. This score helps banks determine if you’re likely to maintain a positive balance, avoid overdrafts, and manage your account responsibly.
For example, someone with frequent overdrafts or unpaid fees might be seen as a higher risk for banks, even if they have a good credit score. By using ChexSystems, banks can screen applicants specifically for issues related to account management rather than credit repayment behavior.
Risks Assessed by ChexSystems vs. Credit Scores
- ChexSystems Score: This score measures potential risk for deposit accounts, focusing on account management habits like overdrafts, unpaid fees, and involuntary account closures due to mismanagement. If you have a low ChexSystems score, it usually indicates problems with maintaining bank accounts rather than issues with paying off loans or credit cards.
- Credit Score: Your credit score, generated by companies like FICO or VantageScore, reflects your creditworthiness determined by the information on your credit report. This includes payment history, debt levels, and length of credit history as reported by the three major credit bureaus; Equifax, Experian, and TransUnion. Lenders and credit card companies use this score to decide if you qualify for loans and at what interest rate.
In short, while both scores help institutions assess financial risk, ChexSystems scores are specific to bank account behavior, whereas credit scores relate to borrowing and repayment habits. This is why someone with a low ChexSystems score may face challenges opening a new checking account, even if they have an excellent credit score.
How to Get Your ChexSystems Score
If you’re considering opening a new bank account, knowing your ChexSystems score can be helpful in understanding how banks view your application. Under the Federal Fair Credit Reporting Act (FCRA), you have the right to request a copy of your ChexSystems Consumer Score. Here’s how to do it quickly and efficiently.
Requesting Your ChexSystems Score
The simplest way to get your score is by submitting a request through ChexSystems. Here’s what you need to do:
- Visit the ChexSystems website: Go to the ChexSystems site and locate the “Order Your ChexSystems Consumer Score” form. You can either complete it online or print it out to fill in manually.
- Confirm your personal information: Double-check that your name, address, and Social Security number are correct on the form. Providing accurate information will help avoid delays and ensure your request is processed smoothly.
- Submit the form:
- By mail: Mail the completed form to the following address:
- Chex Systems, Inc. Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
- Chex Systems, Inc. Attn: Consumer Relations
- By fax: Alternatively, you can fax the completed form to 602-659-2197.
- By mail: Mail the completed form to the following address:
If available, you may also check if ChexSystems provides a phone or online option for faster processing. Once your request is received, ChexSystems will mail your score to you within five business days.
Important Note: Requesting Scores for Minors
If you need to request a ChexSystems score for a minor (someone under 18), additional documents are required. You’ll need to include copies of the minor’s Social Security card, birth certificate, and a photo ID for the parent or guardian. Also, make sure to provide proof of the guardian’s address. If you are not listed on the birth certificate, you’ll need a court document showing legal guardianship.
This request takes the same amount of time to process, and ChexSystems will mail the score to you within five business days.
Requesting Your ChexSystems Report
Knowing your ChexSystems score gives you an idea of how banks and credit unions might view your risk level, but it doesn’t tell the whole story. For a complete picture, it’s essential to request your ChexSystems report as well.
While your score reflects your overall risk level, the report provides the details behind it, including any specific incidents reported by financial institutions, like overdrafts, unpaid fees, or account closures. These details directly influence your score, so reviewing the report can help you understand the “why” behind your current rating.
You’re entitled to request a copy of your ChexSystems report once a year at no charge. Monitoring this report annually is a smart way to stay on top of any changes and catch potential errors that could impact your ability to open new accounts.
Learn how to order your ChexSystems report and take control of the information that banks and credit unions can see about you.
How to Improve Your ChexSystems Score
If your ChexSystems score is low, there are a few steps you can take to boost it over time. Here are some practical tips to improve your score and make it easier to open a new account:
- Pay outstanding fees: If you have unpaid fees with past accounts, settle these as soon as possible. Clearing these debts can make a positive impact on your ChexSystems profile.
- Avoid overdrafts: Keeping a positive balance and steering clear of overdrafts shows responsible account management. Setting up low-balance alerts can help you avoid overdrafts in the future.
- Check for errors and dispute them: Mistakes happen, and sometimes accounts may be reported incorrectly. Review your ChexSystems report and, if you find any errors, file a dispute with ChexSystems to correct inaccurate information.
- Keep track of your score: Request your ChexSystems score annually to see if your efforts to improve your financial habits are making a difference. Monitoring your score can help you stay on top of your progress.
Final Thoughts
A low ChexSystems score can be frustrating, especially when it keeps you from opening a new bank account. By understanding what goes into your score and taking steps to improve it, you can work toward a better financial profile over time. Remember, your ChexSystems score reflects your banking history, and with some proactive effort, you can make positive changes.
Don’t want to wait five years to open a bank account? You don’t have to. Many consumers face the same challenges with ChexSystems. However, there are plenty of non-ChexSystems banks and second chance bank accounts available. These options provide a fresh start, offering banking services even if your score is less than ideal.
Whether you choose to rebuild your ChexSystems score or explore alternative banking options, you have choices to move forward. Taking control of your ChexSystems profile is a step toward more financial freedom and access to the services you need.
