What You Should Know About Chexsystems

If you've managed to open checking accounts so far without any trouble, chances are you have not heard of Chexsystems. However, if one day your bank refuses your application to open a checking account, then it's probably because of Chexsystems.
eFunds is a company that was created in 1999 as a tool of the financial lending services sector. It in turn produced Chexsystems . eFunds developed Chexsystems to detect any fraudulent activity and to assist financial institutions with risk management analysis, in particular for individual customers.
While your credit score represents your history in paying bills and the way you manage credit, Chexsystems monitors and reports on your banking activities. It looks for unusual or suspicious banking transactions, overdrafts, cashing checks against insufficient funds and not meeting minimum account balances.
With these functions, Chexsystems serves banks in two ways. It verifies your checking activity and also operates similar to how a credit consumer-reporting agency does. Just as with the credit reporting agencies like TransUnion, for example, you can also ask for one free report every year. It's free of charge to you just as your yearly credit report is free of charge to you. This is because it falls under the jurisdiction of the Fair Credit Reporting Act, similar to the credit reporting agencies.
This means that if you are a consumer, you can question any information Chexsystems contains, including the ability to dispute entries. Most banks and credit unions in the United States use Chexsystems. If there's any negative reporting on a particular client, that person may have trouble opening a checking account. Is Chexsystems fair? Some critics have objected to their reporting practices, saying that the system does not report fairly, and unlike credit bureaus with both positive and negative information, critics say that Chexsystems only contains negative information, so that this jeopardizes consumers' reputations who would otherwise be qualified to open checking accounts.
Given the mounting criticism, several banks met in 2000 and they agreed that they would re-consider their policy in approving checking account applications based on Chexsystems reports. Reforms were introduced, some of which include ignoring entries that are more than three years old as long as they are not related to fraudulent activity, disregarding Chexsystems entries that are one year old provided the consumer has settled the debt, and extending the time in which a consumer can repay the debt.
Chexsystems Report: what information is provided? We looked at a sample report and our first impression was "you can't get more thorough than that." The consumer's name and address are at the top of the report. An ID number is provided along with the individual's social security number. When writing Chexsystems, they request that you always refer to your SSS and ID numbers.
If you believe any information in the report is inaccurate, the report states that Chexsystems will investigate any discrepancies you point out. You can also send your inquiry to fax number 602-659-2197.
The next box is "reported information." This reported information originates from mostly financial institutions and is kept by Chexsystems for a period of five years. If there is more than one reported information or transaction, these are individually itemized. It lists the source of the reported information, the individual being reported on (including his social security number and driver's licence), and the type of report (e.g. non-sufficient funds).
Following "reported information" is another box that reads "Inquiries Initiated by Consumer Action." This means transactions initiated by you, the consumer, and shows all your applications for a credit card or any application you made at a financial instituion or bank. This information is kept for up to three years.
The next section is entitled, "Inquiries not Initiated by Consumer Action." This is where it's recorded if other people have asked for information on you, including pre-approval or present creditors, potential investors trying to determine what your risk level is, and so on.
Finally, there's one more box that says "retail Information," which includes checks issued to stores and other retailers that have been returned. When a store receives a check that they can't cash because there are non-sufficient funds, for example, this information is shared with the company called "Shared Check Authorization Network" or SCAN for short. It keeps a database of fraudulent activity and checks that have been returned. In order to obtain information for check authorization and verification, retailers must be SCAN members. This information is used by Chexsystems, but Chexsystems does not become involved in collecting returned checks.
If you've ordered any checks, this is also recorded in your Chexsystems report and it provides a history of your check orders. The next two boxes are validation activities for your driver's licence and social security number. Your driver's licence goes through two processes: validation and verification. Chexsystems validates your driver's licence by matching your licence format with the state-approved format; verification involves confirming your name and place of birth.
So before you write out a check, think of Chexsystems and make sure that you have enough money in the bank to cover the check, that it is your check and not someone else's, and that perhaps it's a better idea to pay for merchandise with cash or a credit card!

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Steven J. Talrechi has been providing advice on second chance checking for more than a decade now. Before you sign up for a second chance checking account, please come to our site for all the most current advice. You are welcome to reprint this article - but get your own unique content version here.

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What You Should Know About Chexsystems If you've managed to open checking accounts so far without any trouble, chances are you have not heard of Chexsystems. However, if one day your bank refuses your application to open a checking account, then it's probably because of Chexsystems. 
eFunds is a company that was created in 1999 as a tool of the financial lending services sector. It in turn produced Chexsystems . eFunds developed Chexsystems to detect any fraudulent activity and to assist financial institutions with risk management analysis, in particular for individual customers. 
While your credit score represents your history in paying bills and the way you manage credit, Chexsystems monitors and reports on your banking activities. It looks for unusual or suspicious banking transactions, overdrafts, cashing checks against insufficient funds and not meeting minimum account balances. 
With these functions, Chexsystems serves banks in two ways. It verifies your checking activity and also operates similar to how a credit consumer-reporting agency does. Just as with the credit reporting agencies like TransUnion, for example, you can also ask for one free report every year. It's free of charge to you just as your yearly credit report is free of charge to you. This is because it falls under the jurisdiction of the Fair Credit Reporting Act, similar to the credit reporting agencies. 
This means that if you are a consumer, you can question any information Chexsystems contains, including the ability to dispute entries. Most banks and credit unions in the United States use Chexsystems. If there's any negative reporting on a particular client, that person may have trouble opening a checking account. Is Chexsystems fair? Some critics have objected to their reporting practices, saying that the system does not report fairly, and unlike credit bureaus with both positive and negative information, critics say that Chexsystems only contains negative information, so that this jeopardizes consumers' reputations who would otherwise be qualified to open checking accounts. 
Given the mounting criticism, several banks met in 2000 and they agreed that they would re-consider their policy in approving checking account applications based on Chexsystems reports. Reforms were introduced, some of which include ignoring entries that are more than three years old as long as they are not related to fraudulent activity, disregarding Chexsystems entries that are one year old provided the consumer has settled the debt, and extending the time in which a consumer can repay the debt. 
Chexsystems Report: what information is provided? We looked at a sample report and our first impression was "you can't get more thorough than that." The consumer's name and address are at the top of the report. An ID number is provided along with the individual's social security number. When writing Chexsystems, they request that you always refer to your SSS and ID numbers. 
If you believe any information in the report is inaccurate, the report states that Chexsystems will investigate any discrepancies you point out. You can also send your inquiry to fax number 602-659-2197. 
The next box is "reported information." This reported information originates from mostly financial institutions and is kept by Chexsystems for a period of five years. If there is more than one reported information or transaction, these are individually itemized. It lists the source of the reported information, the individual being reported on (including his social security number and driver's licence), and the type of report (e.g. non-sufficient funds). 
Following "reported information" is another box that reads "Inquiries Initiated by Consumer Action." This means transactions initiated by you, the consumer, and shows all your applications for a credit card or any application you made at a financial instituion or bank. This information is kept for up to three years. 
The next section is entitled, "Inquiries not Initiated by Consumer Action." This is where it's recorded if other people have asked for information on you, including pre-approval or present creditors, potential investors trying to determine what your risk level is, and so on. 
Finally, there's one more box that says "retail Information," which includes checks issued to stores and other retailers that have been returned. When a store receives a check that they can't cash because there are non-sufficient funds, for example, this information is shared with the company called "Shared Check Authorization Network" or SCAN for short. It keeps a database of fraudulent activity and checks that have been returned. In order to obtain information for check authorization and verification, retailers must be SCAN members. This information is used by Chexsystems, but Chexsystems does not become involved in collecting returned checks. 
If you've ordered any checks, this is also recorded in your Chexsystems report and it provides a history of your check orders. The next two boxes are validation activities for your driver's licence and social security number. Your driver's licence goes through two processes: validation and verification. Chexsystems validates your driver's licence by matching your licence format with the state-approved format; verification involves confirming your name and place of birth. 
So before you write out a check, think of Chexsystems and make sure that you have enough money in the bank to cover the check, that it is your check and not someone else's, and that perhaps it's a better idea to pay for merchandise with cash or a credit card! Article Source: <a href="http://www.allbestarticles.com">AllBestArticles.com</a> About the Author: Steven J. Talrechi has been providing advice on <a href="http://www.badcreditnic.com">second chance checking</a> for more than a decade now. Before you sign up for a <a href="http://www.badcreditnic.com">second chance checking account</a>, please come to our site for all the most current advice. You are welcome to reprint this article - but get your own <a href="http://www.uberarticles.com/?id=26545&p=119">unique content</a> version here.

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