15 Best Banks That Don't Use ChexSystems (2020 Reviews)
If you've made financial mistakes with your checking account in the past, it can be tough to find a new bank willing to do business with you. For a fresh start, it's worth looking for a bank that doesn't use ChexSystems to review potential customers' banking histories.
The 15 Best Banks That Don’t Use Chexsystems
While many banks use ChexSystems to see if someone has a history of overdraft fees or other issues, there are still good banks out there that don't. Other banks offer so-called "second chance" accounts for people who need a fresh start.
It's hard to get through life without a bank account. If you need a checking account to get back on track, here are 15 options to consider.
BBVA gets high marks for its online checking account, which is both affordable and flexible. There is no monthly service charge, and you don't have to maintain a minimum balance to keep your account in good standing. They are also member FDIC.
The list of freebies with a BBVA checking account is worth checking out. Account holders get free online banking and bill pay, free mobile deposits, a free Visa debit card, and unlimited check writing.
While BBVA doesn't use ChexSystems, it does use Early Warning Services (EWS) to screen applicants for things like check fraud, forgery, and check kiting. However, this is unlikely to stop someone with bad credit or a history of overdrafting to qualify for an account.
To open a checking account with BBVA, new account holders must deposit at least $25. You can't do this entirely online, with most users reporting it taking under five minutes to apply and get approved.
Chime is an online-only bank, which is ideal for people who like the convenience of banking with their smartphone. There is no credit check to apply for an account, and Chime doesn't use ChexSystems.
Even better, there are no fees when you open a Chime checking account. The app doesn't charge monthly maintenance fees or overdraft, and account holders can use ATMs for free at more than 38,000 locations.
There is no minimum deposit required to open a Chime account. On the downside, it can be tricky to deposit cash to your account, as you'll have to visit a Green Dot location in person to make it happen.
SoFi is another online bank that offers a checking account with no ChexSystems. While there are no physical branch locations, account holders can visit a network of over 55,000 ATMs nationwide for free.
Like many other online banks, SoFi's checking account comes with zero fees. If you overdraft your account, SoFi simply cancels the transaction without charging you.
One thing that SoFi apart from its online bank competitors is physical checks. With SoFi, you can get physical checks for free if you need them.
#4. Navy Federal Credit Union
Navy Federal Credit Union serves more than 8 million members, making it the biggest credit union in the country. To join, you must be active-duty or reserve military, a military veteran, a Department of Defense employee or contractor, or the family member of someone who meets membership criteria.
Members get free checking with no monthly fees, however, the overdraft fee is $29. There are no overdraft fees if you link your Navy Federal savings account to your checking and have enough funds in savings to cover any withdrawals.
Navy Federal has about 350 physical branch locations, and members can take advantage of over 30,000 ATMs without paying a fee.
#5. First American Bank
First American Bank is a traditional bank with physical branches in Illinois, Wisconsin, and Florida. It also offers online banking to customers in all 50 states.
The Fresh Start Checking Account requires a $50 deposit to open, and account holders must pay a $9.95 monthly fee. However, there is no minimum balance required, digital statements are free, and account holders get unlimited check writing.
#6. SunTrust Bank
SunTrust Bank offers an Essential Checking Account with no ChexSystems, so it's a good fit for people with a rocky banking history. There is a $100 minimum deposit to get started, and a monthly $7 maintenance fee.
However, there are a few ways to get the monthly maintenance fee waived, including maintaining a daily collected balance of $500 or more, having direct deposits totaling at least $500 each month, or initiating a minimum of 10 transactions each month. You can also get the monthly fee waived if you open your account as a student.
#7. Peoples Cash Solutions
Peoples Cash Solutions offers free online banking, along with free paper checks with its Second Chance Checking Account. There is a minimum $30 deposit required to open the account, along with a $4.95 monthly fee.
On the downside, Peoples Cash Solutions doesn't offer a mobile app. However, you can view your account online and make payments over the web without paying a fee.
Peoples Cash Solutions also gives account holders a free Mastercard debit card and free monthly paper account statements.
#8. Renasant Bank
Renasant Bank doesn't use ChexSystems, EWS, or Telecheck, so it's worth looking into if you're worried about a negative banking history preventing you from opening a checking account.
Renasant offers both online banking and online bill pay. Account holders also receive a Mastercard debit card connected to their account, along with unlimited check writing
To open an account, you must deposit at least $50. There is also an $8 monthly maintenance fee unless you sign up for eStatements or keep a daily balance of at least $500.
#9. TD Bank
TD Bank offers several types of checking accounts, but its Simple Checking Account is probably best suited for people looking to rebuild after financial mistakes. The Simple Checking Account requires no minimum deposit and free online statements.
Account holders must pay a $5.99 monthly fee, but there is no minimum balance requirement to keep an account in good standing. Account holders also receive a 0.25% discount on personal loans and home equity loans.
#10. First Convenience Bank
First Convenience Bank is a division of First National Bank Texas. First Convenience Bank doesn't use ChexSystems for any of its five checking account offerings: Power Checking, Checking with Interest, President Select High Yield Checking, eAccount, or Power Stash.
According to First Convenience, its Power Checking Account is its most popular. Account holders must deposit $20 to open an account online, but there is no minimum deposit required if you open an account in person at a branch location.
There is a $12 monthly maintenance fee for the Power Checking Account, but the fee is waived for account holders age 55 and older. The bank will also waive the maintenance fee if you keep a minimum daily balance of $100, use your debit card at least eight times per month, or set up at least $100 in monthly direct deposits.
#11. TCF Bank
TCF Bank serves customers in Arizona, Colorado, Illinois, Michigan, Minnesota, South Dakota, and Wisconsin. Its Free Checking Account has no monthly fee and requires a minimum $25 to open.
On the downside, TCF charges high fees, including a $37 overdraft fee. It's also tough to find detailed information about account terms and conditions on the TCF website.
#12. Fort Sill National Bank
Fort Sill National Bank (which now goes by FSNB) serves both civilians and members of the military. Its Basic Checking Account requires a minimum $5 deposit.
There is a $6 monthly fee, but you can get it waived if you keep your balance above $75. Paper statements are $3.50 per cycle, but there is no cost for electronic statements.
#13. Southwest Financial Federal Credit Union
Southwest Financial Federal Credit Union offers a Checkless Checking Account it describes as "great for those with previous trouble qualifying for a checking account."
The account comes with online banking and a mobile app, along with MoBi Anytime Deposit that lets you deposit checks with your smartphone.
Originally founded to serve employees of Kroger grocery stores, Southwest Financial Federal Credit Union has extended membership to other select employee groups over the years. The credit union doesn't publish a list of which groups are eligible to join, however, so you might have to check with your employer to see if membership is available.
#14. US Bank
The monthly maintenance fee is $6.95, but you can get it waived by maintaining a minimum average balance of $1,500 or setting up direct deposits totaling at least $1,000. US Bank also waives monthly fees for account holders age 65 and older.
#15. United Bank
United Bank offers a Free Checking Account with no minimum balance and no monthly fees. Account holders receive free online banking, a Visa debit card, and mobile check deposits.
However, the bank has a limited service area, with branches in Virginia, West Virginia, Maryland, Pennsylvania, Ohio, North Carolina, South Carolina, and Washington, D.C.
What Is ChexSystems?
ChexSystems is a consumer reporting agency similar to credit bureaus like Experian, Equifax, or TransUnion. Instead of checking your credit history, however, ChexSystems runs reports on your banking history.
When you submit an application to open a checking account, most banks want to know if they can trust you to handle your account responsibly. Instead of taking your word for it, they ask ChexSystems to gather any records of bounced checks, overdrafts, or other negative banking-related items in your past.
ChexSystems gets this information from the network of banks and credit unions that share data about customers' banking histories. In turn, ChexSystems analyzes this info and uses it to generate a risk score for each consumer.
About 80 percent of banks and credit unions use ChexSystems, so it can be difficult to find a bank that doesn't rely on ChexSystems reports. Other banks use EWS, which reports past accounts flagged for things like fraud, forgery, or check kiting.
How Does ChexSystems Work?
Like the credit bureaus, ChexSystems gathers information about your past financial activities. In ChexSystems' case, however, the information centers around your banking records.
ChexSystems uses your information to prepare both a report and a risk score. This allows banks to determine if they want to do business with you.
Like a credit report, a ChexSystems report, which it calls a "consumer disclosure," contains basic identifying information as well as details about any negative banking history. Common items in a ChexSystems report include unpaid fees, bounced checks, overdrafts, suspected fraudulent activity, unpaid negative balances, and public records related to your checking account.
ChexSystems reports negative items for five years. Under federal law, consumers are entitled to one free ChexSystems report every 12 months.
You can request your ChexSystems report online by submitting a request on the ChexSystems website. You can also get your report by contacting ChexSystems by phone at 800-428-9623 or mail at:
ChexSystems, Inc.Attn: Consumer Relations7805 Hudson Road, Suite 100Woodbury, MN 55125
What Are the ChexSystems Scores?
ChexSystems assigns consumers a risk score ranging between 100 and 899. The lower your score, the greater risk you pose as a potential banking customer, so you want as high of a score as possible.
Unlike a credit score, however, there is no definitive range of scores for ranking good, bad, or in the middle. This is because ChexSystems doesn't release its internal metrics for calculating risk scores to the public.
5 Benefits of Banks That Don’t Use ChexSystems
If a negative banking history is making it tough to open a new checking account, you might be resigned to going without one. However, it can be quite difficult to get through life without a bank account.
Moreover, there are real benefits to having a checking account. The good news is there are plenty of reliable, consumer-friendly banks that don't use ChexSystems.
Even better, these banks offer benefits you can't get by using banking alternatives. Here are five advantages to keep in mind.
- Save on check cashing service fees - Check cashing services can give you access to your money, but they come with fees. For example, Walmart charges $4 to cash a check up to $1,000.
- Avoid fees associated with prepaid debit cards - Prepaid debit cards can be a viable alternative to a checking account, but many charge a monthly fee, and some charge activation fees and transaction fees.
- Keep your money safe - A bank account gives you a safe spot to keep your hard-earned money. It's also easier to keep track of your balance by reviewing your statements or using mobile banking.
- Your money is insured - When you bank with a financial institution that's FDIC-insured, your money is protected up to $250,000. You can find a bank with FDIC insurance by using the FDIC's bank find tool.
- Built-in fraud protection - When you use a bank debit card, you're protected if your card is lost or stolen. You might get similar protection using a prepaid debit card, but not all issuers offer fraud protection.
Non-ChexSystems vs. Second Chance Banking: What’s the Difference?
In some cases, banks are willing to extend something of an olive branch to people who have a negative banking history. These banks offer "second chance" bank accounts that give consumers an opportunity to rehabilitate their banking record.
Second chance bank accounts are pretty much what they sound like: a chance to make a fresh start despite past mistakes. Banks that offer these types of accounts might still use ChexSystems, but they're willing to overlook a problematic risk score or a bad report.
On the downside, second chance bank accounts tend to come with fees, such as monthly maintenance fees. They might also lack some of the rewards and features you can expect with a standard checking account.
However, many banks that offer second chance checking accounts give customers the option of converting to a regular account after a period of responsible banking behavior.
How to Fund Your Checking Account and Verify Small Deposits
Once you've been approved for a checking account, your next step is to fund it. This is good practice, as it allows you to verify that your deposit when through and your account is working properly.
If your bank has a physical branch, you can fund your account by making a deposit in person. If your bank is online, however, you have a couple of options for funding your account.
One method for funding a digital checking account is to transfer money from an online account you already own. You can do this by linking your accounts together.
If you don't maintain any other digital bank accounts, you might be able to fund your new checking account by mailing in a money order. You can purchase money orders from a variety of places, including grocery stores, the post office, and retail chains like Walmart.
Once you have made a deposit, you should check your account to make sure it appears. One strategy is to make a couple small deposits to verify that the funds are making it into your account with no problem.
Can You Dispute ChexSystems?
If you believe an item on your ChexSystems report is inaccurate, you have a right to dispute it with both ChexSystems and the bank that reported it. Under the Fair Credit Reporting Act (FCRA), both the bank and ChexSystems are required to investigate any disputes and remove any inaccurate items.
How to Remove Items from ChexSystems
If you suspect there is an inaccurate item on your ChexSystems report, you should take steps to have it removed — much like you would dispute errors on your credit report. The process for removing an item from your ChexSystems report is similar to getting a mistake or inaccuracy deleted from your credit report.
1. Get a copy of your ChexSystems report
First, you should thoroughly review your ChexSystems report. Just as you're entitled by law to one free credit report every 12 months, you're also guaranteed one ChexSystems report.
You can request a copy of your report online, by phone or fax, or through the mail.
- By phone: Give ChexSystems a call at 800-428-9623.
- Online: On the ChexSystems website, fill out the consumer disclosure form and submit it online.
- By fax: Fill out and print the consumer disclosure form and fax it to ChexSystems at 602-659-2197.
- By mail: Fill out and print the consumer disclosure form and mail it to Chex Systems Inc., Attn: Consumer Relations, 7805 Hudson Road, Suite 100, Woodbury, MN, 55125.
2. Dispute errors
If you identify any mistakes or inaccuracies on your ChexSystems report, you can file a dispute with ChexSystems. It's probably easiest to dispute errors online, but you can also file a dispute through the mail or by phone or fax.
- Online - Dispute errors online through the ChexSystems online dispute system.
- By fax or mail - You can send your dispute by fax or through the mail by printing out a copy of the Request for Investigation form on the ChexSystems website. Once you've filled it out, mail it, along with any supporting documents, to Chex Systems Inc., Attn: Consumer Relations, 7805 Hudson Road, Suite 100, Woodbury, MN, 55125 or fax it to 602-659-2197.
- By phone - You can dispute inaccuracies over the phone by calling ChexSystems at 800-513-7125. However, you can dispute reports of identity theft or fraud by phone.
By law, ChexSystems has 30 days to investigate your dispute. If they determine that an item is inaccurate, they're required to delete it from your report.
3. Consider paying any reported debts
If ChexSystems determines that a negative item is accurate, there's not much you can do to persuade ChexSystems to remove it. However, you might be able to negotiate with the original creditor to settle the debt.
The idea is to pay any existing balances so you can get ChexSystems to update your record. Keep in mind, however, that negative information only stays on your account for five years, so be sure to check if a negative item is ready to drop off your report.
4. Ask ChexSystems to update your record
If you pay off an old debt with the original creditor, ask the creditor for a receipt or statement confirming that you paid the debt.
Once you have confirmation from the creditor — usually a bank or credit union — send a copy of the confirmation to ChexSystems with a request to update your record.
Alternatives to Banks That Don’t Use ChexSystems
If you've been turned away by banks due to past banking mistakes, it's worth exploring some alternatives to traditional checking accounts.
Second Chance Checking Accounts
In some cases, banks offer so-called second chance checking accounts geared specifically toward customers with a less than perfect banking record. These accounts are typical checking accounts, but they might have higher fees and fewer perks than a standard checking account.
Second chance checking accounts can be a great way to rebuild your banking history. Here are four second chance accounts to consider.
1. Wells Fargo Opportunity Checking
The Wells Fargo Opportunity Checking Account is only available to consumers who are unable to open a regular checking account because of bad credit or a negative banking history.
The account requires a minimum $25 deposit, but there is no minimum balance required. You can avoid the $10 monthly fee by maintaining a $1,500 minimum daily balance, setting up direct deposits totaling at least $500, or posting 10 or more debit card transactions each cycle.
2. US Bank Safe Debit Account
If you're okay foregoing paper checks, the US Bank Safe Debit Account is a good choice for second chance checking. The account has a $4.95 monthly fee that can't be waived, but there are no overdraft charges.
With the Safe Debit Account, you get online banking and mobile check deposits. You also get a Visa debit card attached to your account.
3. United Bank Gateway Checking
If you start with a United Bank Gateway Checking Account, you can upgrade to one of United Bank's standard checking accounts after six months of responsible use.
On the downside, this account doesn't come with a debit card, but online banking and bill pay is available for $4.95 per month. There is also a $10 monthly maintenance fee.
4. BancorpSouth Second Chance Checking
The BancorpSouth Second Chance Checking Account lets you transition to a standard Bancorp checking account after one year of responsible use. Account holders also receive a Mastercard debit card with their checking account.
There is a minimum $50 deposit required to open an account. BancorpSouth also charges a $10 monthly maintenance fee for this account with no option to waive it.
Prepaid Debit Cards
Prepaid debit cards are another alternative to checking accounts that use ChexSystems. With a prepaid debit card, you load money onto your card in advance and then use it to make purchases on the go.
However, prepaid cards tend to come with fees. For example, you'll typically pay a fee just to add money to your card, and some prepaid card issuers charge a transaction fee every time you make a purchase.
Another downside is that prepaid cards don't get reported to the three major credit bureaus. This means your payment history won't appear on your credit report, so you can't use a prepaid card to build a positive payment history or improve your credit score.
If you've been turned away by a bank due to a negative ChexSystems report, it's worth exploring banks that either don't use ChexSystems or offer second chance checking accounts. Fortunately, there are a number of solid banks and credit unions willing to give consumers a fresh start.
About the Author
Mike is a recognized credit expert and founder of Credit Takeoff. His credit advice has been featured in CNBC, Investopedia, CreditCards.com, Bankrate, Huffpost, The Simple Dollar, Reader's Digest, LendingTree, and Quickbooks. Read more.