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Blacklisted by ChexSystems? What to Know

If you've had banking problems, ChexSystems will alert other banks about them for up to five years. Opening new accounts could be tough. Prepaid cards or second-chance checking could help.
Banking, Checking Accounts
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Blacklisted by ChexSystems? Here’s What to Do

If you’ve been denied a bank account, it might be because of a report you have on ChexSystems. When you apply for a new account, many banks use ChexSystems to see if you have a history of mishandling bank accounts. This can impact their decision to approve you for an account.

The review process is akin to applying for a credit card. A card issuer generally goes through at least one major credit reporting bureau to check your credit. This helps the issuer determine if you’re a risky customer for a new credit card. (Some banks look at your credit score when you apply for a bank account too. Get your score free from NerdWallet.)

Here’s how ChexSystems works and how you may be able to overcome any obstacles.

What is ChexSystems?

ChexSystems is a national consumer-reporting agency that keeps track of people who have misused a checking or savings account, for example by bouncing a check or failing to pay a fee.

More than 80% of banks and credit unions use consumer reports from ChexSystems and other agencies to help them decide about bank account applicants.

Banks and credit unions share information about these individuals and whether the institution closed their accounts. In return, the agency collects these consumer histories and creates risk scores and reports for banks to use as they consider potential customers.

More than 80% of banks and credit unions use consumer reports from agencies such as ChexSystems or Early Warning Services to help them decide whether to approve bank account applicants, according to the National Consumer Law Center.

» Fix your ChexSystems record with these five steps

How ChexSystems works

ChexSystems provides the following to banks:

  • Risk score: ChexSystems Consumer Scores range from 100 to 899. The higher your score, the better, since high scores show that you’re a less risky customer.
  • Report: The report — or “Consumer Disclosure” as ChexSystems calls it — shows items such as unpaid fees (primarily from overdrafts), checks bounced at retailers and suspected fraud. Reports also list credit inquiries, check orders and consumer-initiated security freezes. (If you have been a victim of identity theft, you can place a freeze on your ChexSystems consumer report. This means no new financial account can be approved unless you authorize it.)

You can request both your score and report from the agency, but a ChexSystems report is more useful. It gives you context for why a bank might’ve rejected you, and you can get one copy free every year. To request the report online, fill out this consumer disclosure form on the official ChexSystem website.

You’ll generally receive the report by mail within five business days. But you might not have much in your report, and that’s a good thing: Unlike credit reports, the ChexSystems ones focus mostly on negative account history.

Are credit reports part of the review process?

Sometimes, banks might want more information than just banking history before approving a new customer’s account, including credit reports.

If a bank offers a checking account with a credit option such as an overdraft line of credit, for instance, it might request credit information. Banks can either pull a person’s credit report from one of the major credit reporting bureaus or get additional information that ChexSystems provides.

How long do items stay on a ChexSystems report?

Although federal regulations allow ChexSystems to keep records for up to seven years, the agency keeps them for five years.

ChexSystems keeps records for five years.

ChexSystems may remove a black mark even earlier if, for example, a financial institution requests it, which sometimes happens after a customer spots an error and logs a complaint with the bank. If you review your report and see any incorrect or out-of-date information, you can also submit a dispute on ChexSystems’ website.

How do I get a bank account if I’ve been denied?

Getting blacklisted doesn’t necessarily mean you won’t have access to a checking or other account for the next five years.

Some banks and credit unions offer people with blemished histories so-called second chance checking accounts. Although these typically come with monthly fees, customers often can move to less costly regular checking accounts after successfully managing second chance checking for a year or two.

Some banks and credit unions offer people with blemished histories second chance checking accounts.


“Bank or credit union managers often have the authority to grant account privileges in spite of negative ChexSystems reports,” says Rob Drury, executive director of the Association of Christian Financial Advisors. In addition, you could try opening an account at a credit union, he says: “Some do not subscribe to ChexSystems.”

You also could opt for a prepaid debit card that has low fees and strong protections.

Being denied a bank account because of a negative ChexSystems report or low consumer score isn’t the end of the world. Understanding how the process works and what your current account options are can help you progress toward better money management.

Spencer Tierney is a staff writer at NerdWallet, a personal finance website. Email: spencer@nerdwallet.com. Twitter: @SpencerNerd. NerdWallet writer Tony Armstrong contributed to this report.

Updated Oct. 11, 2017.