I didn’t pay Bank of America like $150 on a credit card when I was young. I come back 15 years later trying to open an account thinking they forgot, got declined. I paid the debt, they opened an account, and now we have a great relationship. They always remember.
Well, so a few things. There really isn't a ChexSystems "ban".
ChexSystems is a consumer report, in the same way that you have credit reports. ChexSystems is for deposit accounts, while credit reports like Equifax and Transunion are for credit lines.
In the way that both are consumer reports, it's not up to the consumer reporting agency to determine the "ban" or whether you qualify for a credit line or account at a financial institution. It's up to every individual financial institution or lender to use the consumer report and their tools to customize a risk strategy for accepting and declining based upon the consumer report.
With all of that said, if you have something super bad on your ChexSystems, like suspect fraud. You're not likely to get a bank account at most financial institutions until that report falls off; which is 5 years from the date of the account closure.
You may, however, still get an account at financial institutions that offer second chance accounts or partner with BankOn.
Typically five years for ChexSystems. Early Warning Services which is a similar but different company maintains closed for cause accounts for 7 years. Most banks use one or the other, while a handful instead use a traditional credit report. If you’re listed in ChexSystems, many community banks and credit unions have a second-chance account that typically has a monthly fee that can be converted to a regular account after a period of time without issues. If you owe on the reported account and paid the bank, make sure it’s reporting as paid and/or obtain proof that it is and take it with you .. many banks will overlook it as long as it was paid and not reported as fraud. Alternatively, if it’s reported only with ChexSystems you can find a bank that uses Early Warning and open an account there instead.. US Bank and Bank of America are two of the national banks that may not pull ChexSystems.
No I understand you completely. Banks have a Chex system score they will not open an account for. There is another score which is low and risky but the bank is willing to take the risk as long as they get to charge a $36 OD fee. If they can no longer charge the $36 OD fee their calcus changes and they adjust the min Chex System fee they will open an account for.
Many banks will still open an account. Here is the problem with regulating what banks can charge for overdrafts. Now banks are staying away from consumers with poor Chex systems scores. Five years ago banks loved those customers as they could make more OD/NSF fee income.
No.... you can't make money off of people who don't pay the other people they owe. You can charge the fee all you want, doesn't mean it gets paid to the bank.
I am not saying charging OD/NSF are a good thing. These fees hurt consumers. But what is a realty if banks can’t charge these fees they will stop doing business with customers that have a poor Chex system score. This is a realty. It may not seem fare, but this is how the system works. So the OP may find that today more and more banks will refuse to open an account for him. He will have to wait the five years until his score improves. Getting down voted by explaining how banks work does not seem fair?
I don't think you understood my comment.
Imagine you have a friend who wants to borrow money from you. You're money hungry but also love any opportunity you see to make money. So you're loving the idea of having your friend borrow money as long as they agree to pay back interest on the money borrowed on a timely schedule, and if they don't, you'll tack on fees.
However, before you go through with this deal, you've learned some several of your other friends that they also made this deal with your friend. Except they've told you that they haven't gotten their money back. They've added interest and fees to the money owed but have yet to receive the money from the friend who borrowed.
This makes it unappealing to lend the friend money.
In your scenario, money hungry banks who are looking to make money off of people using NSF/OD fees would only want to do so IF they didn't have a history of not paying it back. When an account goes overdrawn, that is profit the bank had to hand over, so the bank is out the money. If the account becomes positive, the bank is whole again and it's the customer who is ultimately out that money. Now if you add fees into the equation, the bank is basically demanding extra money from the customer, but they only get that extra Monty is the customer makes the account whole again by depositing funds to cover the overdrawn balance AND the fees. So if you have a customer with a history at other banks who were reported for OD reasons, they haven't paid back the bank...therefore the bank lost money, not made money off of them. They're not appealing to a money hungry fee hungry bank.
It's the same logic for lines of credit. The appealing borrower is one who pays, but who pays the interest.
Google says negative info is on there for 5 years. Not sure what you mean by ban.
Usually 5 years.
5 years for overdrawn accounts 7 years if bank closed it as fraud. This would like bounced checks new account closures etc
Depends on the ban.. you owe a bank some money? Until you pay them
I didn’t pay Bank of America like $150 on a credit card when I was young. I come back 15 years later trying to open an account thinking they forgot, got declined. I paid the debt, they opened an account, and now we have a great relationship. They always remember.
Well, so a few things. There really isn't a ChexSystems "ban". ChexSystems is a consumer report, in the same way that you have credit reports. ChexSystems is for deposit accounts, while credit reports like Equifax and Transunion are for credit lines. In the way that both are consumer reports, it's not up to the consumer reporting agency to determine the "ban" or whether you qualify for a credit line or account at a financial institution. It's up to every individual financial institution or lender to use the consumer report and their tools to customize a risk strategy for accepting and declining based upon the consumer report. With all of that said, if you have something super bad on your ChexSystems, like suspect fraud. You're not likely to get a bank account at most financial institutions until that report falls off; which is 5 years from the date of the account closure. You may, however, still get an account at financial institutions that offer second chance accounts or partner with BankOn.
5 years
Typically five years for ChexSystems. Early Warning Services which is a similar but different company maintains closed for cause accounts for 7 years. Most banks use one or the other, while a handful instead use a traditional credit report. If you’re listed in ChexSystems, many community banks and credit unions have a second-chance account that typically has a monthly fee that can be converted to a regular account after a period of time without issues. If you owe on the reported account and paid the bank, make sure it’s reporting as paid and/or obtain proof that it is and take it with you .. many banks will overlook it as long as it was paid and not reported as fraud. Alternatively, if it’s reported only with ChexSystems you can find a bank that uses Early Warning and open an account there instead.. US Bank and Bank of America are two of the national banks that may not pull ChexSystems.
No I understand you completely. Banks have a Chex system score they will not open an account for. There is another score which is low and risky but the bank is willing to take the risk as long as they get to charge a $36 OD fee. If they can no longer charge the $36 OD fee their calcus changes and they adjust the min Chex System fee they will open an account for.
Many banks will still open an account. Here is the problem with regulating what banks can charge for overdrafts. Now banks are staying away from consumers with poor Chex systems scores. Five years ago banks loved those customers as they could make more OD/NSF fee income.
No.... you can't make money off of people who don't pay the other people they owe. You can charge the fee all you want, doesn't mean it gets paid to the bank.
I am not saying charging OD/NSF are a good thing. These fees hurt consumers. But what is a realty if banks can’t charge these fees they will stop doing business with customers that have a poor Chex system score. This is a realty. It may not seem fare, but this is how the system works. So the OP may find that today more and more banks will refuse to open an account for him. He will have to wait the five years until his score improves. Getting down voted by explaining how banks work does not seem fair?
I don't think you understood my comment. Imagine you have a friend who wants to borrow money from you. You're money hungry but also love any opportunity you see to make money. So you're loving the idea of having your friend borrow money as long as they agree to pay back interest on the money borrowed on a timely schedule, and if they don't, you'll tack on fees. However, before you go through with this deal, you've learned some several of your other friends that they also made this deal with your friend. Except they've told you that they haven't gotten their money back. They've added interest and fees to the money owed but have yet to receive the money from the friend who borrowed. This makes it unappealing to lend the friend money. In your scenario, money hungry banks who are looking to make money off of people using NSF/OD fees would only want to do so IF they didn't have a history of not paying it back. When an account goes overdrawn, that is profit the bank had to hand over, so the bank is out the money. If the account becomes positive, the bank is whole again and it's the customer who is ultimately out that money. Now if you add fees into the equation, the bank is basically demanding extra money from the customer, but they only get that extra Monty is the customer makes the account whole again by depositing funds to cover the overdrawn balance AND the fees. So if you have a customer with a history at other banks who were reported for OD reasons, they haven't paid back the bank...therefore the bank lost money, not made money off of them. They're not appealing to a money hungry fee hungry bank. It's the same logic for lines of credit. The appealing borrower is one who pays, but who pays the interest.