I’ve been getting several emails a day from people who, for one reason or another, have messed up their chances of getting a checking account. Usually, they find out when they’re sitting across the desk from some stuffed suit, who informs them that they’ve been, in essence, blacklisted from getting an account at virtually any bank.

Yep, I’ve been there myself. It’s less of a big deal for me, since I work online and most of my income comes through PayPal anyway. But relatives and some joints like Google and Clickbank still send paper checks now and then, and without a bank account, you’re stuck with those nasty check-cashing places that charge hefty fees. And heaven forbid that someone sign a check over to you – I can tell you from experience that you’d have a better chance getting an air-conditioned cab in hell than cashing one of those suckers.

But I digress…

Usually, if you can’t get a checking account, it’s because you’re listed on Chexsystems, which is essentially like a credit report, but for banks. If you bounced a few checks, you’re probably on Chexsystems. If a bank got pissed and closed your account because you had a few overdrafts, you’re probably on Chexsystems. If you wrote checks and knew the money wouldn’t be in the account… you might be in jail, but you’re definitely on Chexsystems. You get the idea.

The numbers are a little fuzzy when it comes to figuring out how many banks use Chexsystems – depending on the source, it ranges from 80% to 90%. If you ask me, I’d say pretty damned much all of them. Anyway, if a bank pulls your report, you won’t get a bank account unless you can provide a really good excuse… and even then, your chances are slim. Even if you open your account online, the bank will probably pull your Chexsystems report later, and has the right to close your account if it doesn’t like what it sees.

The thing is, this doesn’t just apply to checking accounts. Getting a savings account can be next to impossible too! The logic of this eludes me, but that’s just how it is. Oh, and entries stay on your Chexsystems report for 5 years.

Now, for the obvious question:

How Do I Get A  Checking Account While On Chexsystems?

Well, the answer is… it depends.

First, you need to know what’s on your Chexsystems report. You’re entitled to a free copy of your report if:

• You haven’t ordered your report in the past 12 months; or
• You’ve been denied an account because of a Chexsystems entry within the past 60 days.

You can go to the Chexsystems Consumer Website to order your Chexsystems report for free. It will arrive by mail in about a week – there’s currently no way to access the report immediately online.

Now, if you just have a bounced check or two, and you’ve paid your bank any amounts you owe, you might be able to go into a bank branch, act really sorry and convince the branch manager to approve an account. It helps if you wear a tie or dress and cover up that “Live to Ride” tattoo.

The Chexsystem Victims website also offers lists of non-Chexsystem banks by state. Mary, the owner of this website, was kind enough to send me a list for my state. Most of the banks do use Chexsystems, but make exceptions. I did find a couple of credit unions that specifically stated they don’t use the reporting service at all.

If you have something really bad on your Chexsystems report – say, suspected fraud or misrepresentation when opening your account, your choices are few and far between. Even most “second chance” banking programs (which offer accounts with severely restricted privileges) won’t touch those.

After several months of fumbling around, I did find a solution for getting both a checking and a savings account. Ideal? No. When you’re stuck in Chexsystems, you can’t expect to get the same privileges as somebody who has maintained an account for years with no hiccups.

In my next post, I’ll show you how I did it… and it was a lot less hassle than calling around trying to find a bank that would take me as a customer.

Image attribution: Think Panama