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When you apply for a business checking account, most banks will run a ChexSystems report to see your history with previous checking and savings accounts — similar to a lender running a credit check when you apply for a business loan.
Unlike a credit report, however, a ChexSystems report mostly shows the misuse of checkings or savings accounts, listing actions such as bounced checks, overdraft fees and forced closed accounts.
A negative ChexSystems report doesn’t necessarily disqualify you from getting approved for a business bank account, but it could make the process more difficult.
In fact, according to a Federal Deposit Insurance Corp. survey, over 80% of banks use reports from agencies like ChexSystems or Early Warning Services to decide if they should allow a consumer to open a checking or savings account.
So, here are the options you have to open a business checking account with no ChexSystems report plus some tips to improve your record for the future.
Finding business checking accounts with no ChexSystems
If you have a negative ChexSystems record you can’t fix, there are alternative routes you can take to get a bank account for your small-business finances:
Open an online business checking account with no ChexSystems: Although most financial institutions use ChexSystems as part of their decision-making process for new accounts, there are some banks that don’t.
Sometimes called second chance business checking accounts, these alternative options are perhaps more commonly available in personal banking. As such, you may see the term second chance checking more frequently in the consumer space.
For example, although the neobank Chime doesn’t offer business checking accounts, it does offer a second chance personal bank account with no ChexSystems.
Keep in mind that whether or not a bank uses ChexSystems, it may also run a credit check as part of a checking account application. Although credit checks are much more frequently associated with business loan applications, policies vary by institution.
Here are a few top business checking account options that allow you to apply online without running a ChexSystems report.
LendingClub Tailored Business Checking
BBVA Business Connect Checking*
SunTrust Primary Business Checking
*Online applications for the BBVA Business Connect Checking account are available for sole proprietors only.
Contact your local bank or credit union: Even if a financial institution does not use ChexSystems to evaluate business checking applicants, this information is probably not posted on its website or on other public channels. Although local banks or credit unions may be less likely to offer online applications, branch managers at these institutions might still be willing to work with you despite negative marks on your ChexSystems report.
Research local business checking options and contact a representative to discuss the application process and whether they use ChexSystems as part of the decision-making process. You might find additional checking account options you didn’t know were available.
As an example, Woodforest National Bank offers a Second Chance Business Checking account designed for business owners who have experienced previous bank account challenges. This account includes 250 fee-free transactions per month, a business debit card and has a $15 monthly maintenance fee.
You’ll have to visit a Woodforest location and work with a business banking representative to apply for the account — however, this community bank has over 700 locations across 17 states.
Quick tips to improve your ChexSystems report
It may seem counterproductive to take the time to improve your ChexSystems report when you want to open a business checking account immediately. However, ChexSystems retains a record of reported information for up to five years, so investing the time will benefit you and your business in the long run.
Here’s what you can do:
Request your report. Once every 12 months, you are entitled to a free copy of your ChexSystems report, called the “consumer disclosure report.” Request the report on the ChexSystems website, by mail, phone or fax.
Identify any errors. After you’ve received your report, look for any errors that may be listed. Check for outdated information, misreporting or any other mistakes.
File a dispute. If you find errors on your report, you can file a dispute to have the ChexSystems record corrected. ChexSystems allows you to file a dispute online, by mail or by fax. You also have the option to submit the dispute directly to the source of the information, like the bank or credit union, or have ChexSystems contact the source on your behalf to start the investigation.
When you file a dispute, include any documentation you have to support your correction, such as bank statements, payment receipts, or other similar information. Investigations are typically completed in 30 days, after which time ChexSystems will notify you of the results by mail.
If the investigation confirms that there are inaccuracies on your report, ChexSystems is required by federal law to remove them.
Pay any debts. If your report shows legitimate money owed — in the form of overdrawn accounts or unpaid fees — you’ll want to take any steps you can to pay those debts.
Ask creditors to update your record. Financial institutions are required to update your ChexSystems report after you’ve paid or settled your debt. To ensure that this happens as quickly as possible, you can ask creditors directly to update your file after you’ve paid your debts.
You should keep a record of debt payments and communication with creditors in case you ever need to dispute marks on your ChexSystems report in the future.
As a reminder, ChexSystem retains records of reported information for up to five years, unless the source of the information requests that it’s removed or ChexSystems is required to remove it (like in the case of a successful dispute).
If you’re able to take steps to improve your record, you should see the benefits quickly. If there are items you can’t change, you’ll need to wait for them to clear.
If your ChexSystems report improves quickly, you can apply to open a business checking account online (or in person) without having to worry about whether the bank will check your record. To determine which account is right for your business, you’ll want to consider fees, transaction limits, ATM access and other features.
» Need help getting started? Check out our roundup of the best free business checking accounts.