Getting denied for a bank account isn’t just frustrating—it’s also a sign that something could be wrong with your banking history. One lesser-known factor that can lead to account denials is your Early Warning Services (EWS) report. Think of EWS as a background check specifically for your banking activity. Banks often check it to spot any history of fraud, closed accounts, or even minor mistakes.
EWS reports don’t focus on credit scores or loan payments, but instead track your past banking actions. This report can impact your ability to open a new account, making it essential to know what’s in it and how it could affect your banking options.
Is a bank account rejection stopping you from managing your finances? Keep reading to learn what EWS is, what it tracks, and how to handle any issues on your report.
What is Early Warning Services (EWS)?
Early Warning Services (EWS) is a consumer reporting agency focused specifically on banking history, which differs from credit bureaus and other services like ChexSystems and TeleCheck. While ChexSystems and TeleCheck report on issues like overdrafts or bounced checks, EWS centers on identifying fraud and misuse in bank accounts.
Major banks, including Bank of America, Capital One, Chase, and Wells Fargo, are involved in EWS, and the network now includes around 2,500 financial institutions, government entities, and payment companies.
EWS detects fraud by tracking account activities that indicate risk. It flags actions such as check kiting (writing checks on accounts with insufficient funds), counterfeit transactions, and fraudulent checks. However, even minor issues, like unresolved overdrafts or accounts closed due to unpaid fees, can appear on an EWS report, affecting a person’s ability to open new accounts.
When a bank accesses your EWS report, they’re examining any history that could signal financial instability or potential fraud. If red flags appear, the bank may deny your application, making it important to know what’s in your report and resolve any issues before applying for a new account.
What’s in your EWS report?
Your EWS report provides a detailed record of your banking history, helping financial institutions assess potential risks before allowing you to open new accounts. Here’s a breakdown of the main elements that may appear on your EWS report:
- Personal information: This includes your basic identifying details, such as name, date of birth, Social Security number, and contact information.
- Account history: Early Warning Services compiles your history with financial institutions, covering checking and savings account details. It may show account numbers, bank names, opening and closing dates, current balances, and account status (e.g., active or closed due to unpaid fees).
- Inquiries: Whenever a bank or other institution requests your EWS report, it leaves a record of the inquiry. These inquiries indicate which entities have reviewed your EWS report and when they did so.
- Deposit score: Unlike a credit score, the deposit score is unique to EWS, focusing on your banking history rather than your credit activities. This score offers banks an estimate of how likely you are to responsibly manage a new account. It considers factors like overdrafts, account closures, and any reported incidents related to fraud.
More About the Deposit Score
The EWS deposit score evaluates your history as a banking customer. This score reflects patterns such as:
- Frequent overdrafts: Repeated overdrafts can reduce your deposit score, signaling financial instability.
- Closed accounts: Accounts closed by a bank due to unpaid fees or negative balances will impact your score.
- Fraud-related issues: Incidents of fraud or misuse, like check forgery, heavily affect the deposit score.
Banks use this deposit score to decide whether to approve a new account for you. A lower score may lead to rejection, while a higher score indicates responsible banking history.
How to Request Your EWS Report
You can request a free copy of your EWS report once per year under the Fair Credit Reporting Act (FCRA). Here’s how to get it:
- Call EWS: Dial (800) 325-7775 during business hours (Mountain Standard Time) to request a copy.
- Mail request: Alternatively, download and complete the consumer identification form from the EWS website, then mail it to EWS.
Processing time: Reports usually take around 7-10 business days to arrive, so plan accordingly if you need it for an upcoming bank application.
Know Your Rights: Consumer Protection Under the FCRA
Early Warning Services is regulated and limited by federal laws put in place to protect consumers. Specifically, it’s subject to the Fair Credit Reporting Act, or FCRA. The FCRA states you must be able to request a free copy of any financial consumer reports on an annual basis.
This includes your EWS report. Furthermore, if your rights under FCRA are violated, you’re entitled to recover actual and/or statutory damages, attorney’s fees, court costs, and punitive damages. However, there are statutes of limitations surrounding the amount of time you have to file suit.
How to Dispute an Item on Your EWS Report
If you spot an error on your EWS report, you have the right to dispute it and request a correction. The process involves gathering the necessary documents, submitting your dispute, and understanding what to expect during the investigation. Here’s a step-by-step guide to help you handle the dispute effectively.
Preparing to Dispute an EWS Report
If you find incorrect information on your EWS report, you have the right to dispute it. Here’s how to get started:
- Gather key information: Collect important details, including:
- Your Consumer ID Number, which is on your EWS report.
- A description of the disputed item(s), including account numbers and amounts.
- An explanation of why the information is wrong, such as an incorrect dollar amount or mistaken account status.
- Collect supporting documents: Include copies of documents that support your dispute, like bank statements or letters from your bank.
- Organize each dispute item: Prepare a separate sheet for each error, detailing the issue and including all relevant evidence.
The Dispute Process and What to Expect
Once you have your documents ready, here’s how the dispute process works and what you can expect along the way:
- Submit your dispute: Send your dispute to both EWS and the reporting bank. Ensure all items are clear, with supporting documentation attached.
- Investigation timeline: EWS generally has 30 days to investigate. During this period, they’ll contact the bank to verify the details of your dispute.
- Outcome notification: At the end of the investigation, EWS will inform you of the results. If the item is corrected, your report will reflect this. If EWS and the bank uphold the information, you can add a rebuttal statement to your report for future reference by other banks.
- Following up: If you encounter delays or are dissatisfied with the outcome, follow up with both EWS and the bank. Keeping records of all your communications can support any further action if needed.
Expected timeline: The entire process typically takes about 30 days, though complex cases may require additional follow-up.
Second-Chance Bank Accounts: A Fresh Start for Your Banking Needs
If you’ve been denied a traditional bank account due to a negative EWS report, second-chance banking options can help you rebuild your banking history. Here are some top options to consider:
U.S. Bank Smartly® Checking
U.S. Bank offers the Smartly® Checking account, which is a good fit for those with past banking issues. Highlights include:
- Sign-Up Bonus: Up to $450 for new accounts (limited-time offer through December 30, 2024).
- Monthly Fee: $6.95, waived with a $1,500 minimum balance or a $1,000 monthly direct deposit.
- ATM Access: Free transactions at U.S. Bank and 40,000+ MoneyPass® ATMs.
U.S. Bank does use ChexSystems, but may approve applicants with minor records if there’s no fraud history.
SoFi Checking and Savings
SoFi’s Checking and Savings account offers easy access and high savings rates:
- Sign-Up Bonus: Up to $300 with qualifying direct deposits.
- No Monthly Fees: Enjoy a fee-free account with no minimum balance.
- High APY: Earn up to 4.00% on savings with direct deposit.
SoFi provides access to 55,000+ ATMs through the Allpoint® Network, with no overdraft fees.
Current Mobile Banking
Current is a fintech option that doesn’t rely on ChexSystems or credit checks, offering:
- Fee-Free Overdraft: Up to $200 for eligible accounts.
- Early Paycheck Access: Get paid up to two days early with direct deposit.
- ATM Access: 40,000+ fee-free Allpoint ATMs.
With no minimum deposit requirement, Current offers features like credit building through debit card use and savings options with up to 4.00% APY.
Second-chance accounts are an effective way to get back on track with banking. They may come with a few limitations, like restricted overdraft protection or fewer branches, but they’re a practical solution for re-establishing a positive banking record.
Final Thoughts
A negative EWS report doesn’t have to close off your banking options. With second-chance accounts and the ability to dispute inaccuracies on your EWS report, there are steps you can take to rebuild your banking history.
Staying informed about your EWS report and understanding how it affects your banking can help you move forward with confidence. Whether you’re looking to open a new account or clear up past issues, knowing what’s in your report and taking proactive steps can make a real difference.
Frequently Asked Questions
How long does negative information stay on an EWS report?
Negative information generally stays on your EWS report for up to five years. However, some banks may report certain issues for shorter periods, depending on their policies.
Will EWS affect my credit score?
No, EWS does not impact your credit score. EWS reports focus solely on your banking history and are not shared with credit bureaus like Experian, Equifax, or TransUnion.
Can I remove accurate but negative information?
Accurate information, even if negative, usually cannot be removed from your EWS report. However, it will eventually fall off your record, typically after five years. If you believe the information is causing undue hardship, you may consider adding a personal statement to explain the situation.
How is EWS different from ChexSystems?
While both EWS and ChexSystems track banking history, they serve slightly different purposes. ChexSystems primarily reports on account mishandling, like overdrafts and bounced checks, whereas EWS places more emphasis on detecting fraud, such as check forgery or identity theft. Some banks use one or both systems when reviewing account applications.
