7 Banks That Don’t Use ChexSystems: Local & Online

Short Answer: Some large U.S. banks don’t use ChexSystems to determine account approval. While these banks may still pull your ChexSystems report, they are typically more concerned with spotting red flags for bank fraud rather than judging minor financial infringements like bounced checks. Other options for people with negative ChexSystems reports include “second chance” accounts or prepaid reloadable debit cards. For more details, including information on how to request your ChexSystems report, see below.

What Is ChexSystems?

ChexSystems is one of the primary ways that banks assess the risk of letting consumers open new accounts. Like the major credit bureaus (TransUnion, Experian, and Equifax), ChexSystems builds reports on consumers who have abused lines of credit. Essentially, ChexSystems is a specialty consumer reporting agency that monitors the fraudulent and irresponsible use of checking and savings accounts. Banks want new customers to have a good record of handling these accounts, and they are unlikely to let someone open an account if that person has a history of bank fraud, bounced checks, or other banking issues. Credit unions also use ChexSystems; for the list of credit unions that don’t use ChexSystems, see our article.

Many people are unaware of ChexSystems until they are denied an account due to their ChexSystems report. If a person had a checking or savings account closed for fraud or abuse in the past five years, it’s likely that their bank sent information about the account to ChexSystems. The report also includes information about the following:

  • Any returned (bounced) check that retailers have reported receiving from that person (this information is provided to ChexSystems from Certegy Check Services)
  • Any recent inquiries for the person’s ChexSystems report
  • The number of checks the person has ordered in the past five years

Common Mistakes That Damage Your ChexSystems Report

When banks see problems on a ChexSystems report, they may refuse to open a checking or savings account for that individual. Since flagged accounts stay on the report for five years, the best way to prevent problems when opening another bank account is to avoid getting a ChexSystems record to begin with. ChexSystems has published a list of some common mistakes to avoid, including:

  • Bouncing checks
  • Co-signing on an account that another person uses for fraudulent or suspicious activity
  • Depleting the funds in a checking account to $0 rather than closing the account
  • Failing to report lost or stolen checks
  • Forgetting to discontinue any automatic payments before closing a checking account

Request a Copy of Your Report

For people who have been denied a new bank account or people who just want to know what might be on their ChexSystems report, ChexSystems will provide a copy of the report to consumers who submit a request online. Once ChexSystems has processed the request, the consumer disclosure report will be sent through the United States Postal Service, normally within five business days.

After receiving the report, it is important to review it for accuracy to rule out the possibility of identity theft or incorrect information. If identity theft is suspected, it is possible to place a freeze on a consumer report. If any errors are found, each individual has the right to dispute his or her record.

How to Submit a Dispute

If you find any errors in your consumer disclosure report, it is possible to file a dispute either with the institution that reported the incorrect information or with ChexSystems. A ChexSystems investigation can take up to 30 days, with the possibility of a 15-day extension if any additional information is submitted during the process. An error on your ChexSystems report could be an indication of identity theft, so if you see something that shouldn’t be there, take it seriously and address it as soon as possible to protect yourself from further damage to your credit history.

Banks That Don’t Rely on ChexSystems

Most banks use ChexSystems to some degree, and bank policies can vary by branch. The best way to find out if your local bank uses ChexSystems is to call or go to a branch in person and ask. However, most banks are not willing to share the details of exactly how they determine approvals. In the course of our research, we found many were unwilling or unable to answer questions about their specific use of ChexSystems due to security concerns.

We were, however, able to find several instances of banks publicly announcing that they do not use ChexSystems or that they will no longer use it in specific cases, such as for judging minor infringements or assessing creditworthiness. In many cases, a bank’s primary concern when pulling a ChexSystems report is identifying red flags for fraud.

Below, we’ve compiled the list of banks that either don’t use ChexSystems at all or that don’t turn down customers for minor negative marks on their ChexSystems report. Note that banks are regularly changing and updating their policies for reviewing customers’ financial histories. A bank with fairly lenient approval criteria today may not be so flexible months or years from now.

Axos Bank Essential Checking

Axos Bank does not pull a Chexsystems report to determine approval for its Essential Checking account. The account is virtually fee-free and also features early direct deposit.

Note: Axos operates mostly online, but has three physical branches

BBVA Free Checking

Instead of ChexSystems, BBVA uses Early Warning Services (EWS) to assess the risk of letting a customer open an account. EWS primarily keeps track of negative/fraudulent account activity and provides reports to the bank. If you are concerned about being denied an account due to a poor ChexSystems report, this may be a good option for you, as BBVA is known for its willingness to work with customers who have a rocky financial history.

Capital One 360 Checking

Capital One does pull ChexSystems reports, though it tends not to hold minor infringements against applicants and considers other factors when approving or denying an account. Applicants with a history of banking fraud, however, will likely be refused.

Note: There are no branches for this online account, but the CapitalOne ATM locator will show all fee-free ATMs nearby

Citibank Basic Banking Package

Much like Capital One, Citibank primarily uses ChexSystems to look for repeated incidences of fraud, not small one-time offenses like bounced checks.

  • Minimum opening deposit: $0
  • Monthly account service fee: $12
    • This fee can be avoided by maintaining an average monthly balance of at least $1,500 in eligible linked accounts, making one qualifying direct deposit and one qualifying bill payment per statement, or by being 62 years or older
  • Find out more or apply online, or find a Citibank branch

Frost Bank (Checking and Savings)

Frost Bank is often willing to work with customers who have poor ChexSystems histories. Frost may ask these customers to provide a letter from the institution that reported them confirming they do not owe it any money.

  • Minimum opening deposit: $25 for checking; $50 for savings
  • Monthly account service fee: $8 for checking; $3.50 for savings
    • Checking service fee waived with a $100 monthly deposit, $1,000 minimum daily balance, $5,000 combined average in personal deposit accounts, one account owner under age 25, or a Frost Premium Account
    • Savings account fee waived with a $300 minimum daily balance, monthly deposits totaling $10 or more, one account owner under age 25, or a Frost Premium Account
  • Find out more or apply online, or find a Frost Bank branch

Renasant Checking

Renasant Bank is not known to pull ChexSystems reports.

USAA Bank Free Checking

USAA Bank may pull your ChexSystems report, but it is still typically willing to work with those who have negative marks. You must be affiliated with the military to open an account with USAA.

Other Options for People With a ChexSystems Record

A few of the larger banks and some smaller regional banks will allow a consumer with a bad ChexSystems record to open what is called a “second chance” bank account. These accounts often have stricter limitations and higher fees, but since they are specifically designed for people with a bad banking history, it is easier to be approved. Often, after a 12-month period, customers may request to upgrade to a standard account.

Another option is to apply for a prepaid reloadable debit card. With a prepaid debit card, you can receive direct deposits and shop online without the risk of overdrawing your account. Some even offer consumer protection and FDIC coverage, just like standard bank accounts. But, unlike traditional checking accounts, there are no paper checks and check cashing fees may apply.

Banks That Offer Second Chance Accounts

Axiom Bank Opportunity Checking

  • Minimum opening deposit: $25
  • Monthly account service fee: $12.95; reduced to $8.95 with any direct deposit
  • Find an Axiom Bank branch

Bank of Arkansas Opportunity Checking

BBVA Easy Checking

Note: You can apply for a regular checking account, and if you’re refused, BBVA will automatically offer the option to open an Easy Checking account.

CenterState Fresh Start Checking

Peoples Cash Solutions Second Chance Checking

Wells Fargo Opportunity Checking and Opportunity Savings Accounts

Woodforest National Bank Second Chance Checking

Banks That Offer Prepaid Reloadable Debit Cards

BBVA Compass ClearSpend Visa

BB&T Prepaid Debit Card

Commerce Bank mySpending Card

Regions Now Card Prepaid Visa

Banks That Rely on ChexSystems

As stated above, most banks do use ChexSystems, including nearly all of the large banks in the United States. However, not all banks (and not even all branches of the same bank) use information from ChexSystems the same way. Some banks will deny a new account entirely based on a ChexSystems record, while others have options like reloadable debit cards and second chance accounts for customers with negative ChexSystems reports, as noted above. The following banks are known to do a more in-depth look at your ChexSystems report, but it’s still best to contact the customer service department or your local branch to find out if there may be options available to you.

  • Ally Bank
  • Bank of America
  • Chase
  • CIT Bank
  • HSBC
  • PNC
  • Regions Bank
  • Citizens Bank
  • Discover
  • HomeStreet Bank
  • Nationwide Bank
  • NorthOne Business Bank

In Summary

Bank accounts for people with poor ChexSystems reports are available from BBVA, Capital One, Citibank, Forst Bank, Renasant, and USAA. Alternatively, banks like Axiom Bank, CenterState, and Wells Fargo offer “second chance” checking accounts for customers with poor ChexSystems reports. Applying for a prepaid reloadable debit card is another option that doesn’t rely on ChexSystems for approval. It is important to know what is on your ChexSystems report and to understand how banks use that information, so it is best to contact the customer service department or a branch of the bank to which you are applying to find out which option is best for you.

1 Comment

  • A Gannon says:

    Citizens Bank ABSOLUTELY does a report. I worked for them and they require their employees to complete this before opening an account. There are possibly some employees that don’t run the report just to make their quota amount of new accounts, but most will follow the company rules.