How to Open a Business Checking Account with No ChexSystems

If you’ve ever applied for a bank account, you may already know that a credit check is part of the process. Most U.S. banks use a database known as ChexSystems, which is a nationwide credit reporting agency that tracks consumer banking history.

For businesses, this reporting agency can become an issue. You may have a squeaky-clean banking history, only to run into trouble opening a business bank account due to one negative incident. Getting around those bank credit checks can be tricky, but it isn’t impossible.

What is ChexSystems?

If you apply for credit, a lender will run a credit check, which looks at your history of paying bills. Banks are more concerned about your history as a bank customer. This can be an indicator of the risk you’ll pose as a new account holder.

When you’re applying for a deposit account at a bank, decision-makers will look at any negative activity on your ChexSystems report. This can include items like:

Forced account closures
Overdrafts
Unpaid negative balances
Account abuse including fraudulent ATM and card use
Potential fraud or identity theft
Recent account applications

Negative activity remains on your report for five years unless the entry is removed by the original source or ChexSystems is required to remove it by law. As with a poor personal credit history, though, a ChexSystems issue can delay your plan to set up a business account.

How does ChexSystems impact small business banking?

A bank account is an important part of running a business. Even a one-person operation has to separate personal and business transactions for tax purposes. This is especially important once you start paying employees.

Whether you open a personal or business bank account, though, a bank or credit union will check your credit history. You’ll present your name and Social Security number and wait for approval. This process typically has lenders running something called a ChexSystems report, which searches the history of accounts under that Social Security number.

If you’re denied an account, you won’t be able to open a dedicated business bank account. But there are other options, including non-ChexSystems banks and second-chance checking accounts. The key is to know where to open a business checking account online with no ChexSystems report or more lenient policies.

How to Know If You Have ChexSystems Entries

The Fair Credit Reporting Act allows you one free copy of your ChexSystems disclosure report every 12 months. You can request a copy of your report by simply completing this form.

If you aren’t sure what your report might say, reviewing it can be a great proactive measure. This will help you determine whether banks might see you as a risky depositor.

Finding Business Checking Accounts with No ChexSystems

Although most banks use ChexSystems, not every lender in the U.S. does. A bank that doesn’t use ChexSystems can be a great option if local banks and credit unions aren’t likely to approve you for a new business checking account. Here are six banks that don’t use ChexSystems:

1. Chime Checking

Chime Checking is an online-only mobile banking app that can also work for small businesses. There are no account fees or balance requirements, and you can even earn 2.00%³ interest on your money⁸.

The signup process is fairly straightforward, taking only minutes and not pulling a report from ChexSystems. But since Chime doesn’t offer business checking accounts, you won’t get any of the business-friendly features that come with business checking accounts.

Fees:

No service charge
No fees for overdrafts⁵
Fee-free¹ ATM access at MoneyPass ATMs in a 7-Eleven location or any Allpoint or Visa Plus Alliance ATM

Balance Requirements:

No opening deposit required
No minimum monthly balance required

Business-Friendly Features:

Access to direct deposits up to two days early²
Secured credit card can help you build credit
Earn 2.00% APY on your balance

2. Novo Business Checking

Small business owners have realized the many benefits of online banking in recent years. They offer competitive rates, tempting perks, and flexible approval processes for loans and accounts.

With Novo, you can get an online business checking account without the ChexSystems approval process. Best of all, you can apply for an account in less than 10 minutes.

Fees:

No service charge
$27 insufficient funds fee
All fees for ATMs reimbursed

Balance Requirements:

$50 opening deposit (recommended)
No balance minimums

Business-Friendly Features:

Both virtual and physical debit cards
Free ACH, mailed checks, and incoming wires

3. Bluevine Business Checking

Bluevine is designed for business banking, with a fee-free structure that keeps costs at a minimum. You can apply online in minutes with no ChexSystems check required.

What’s really great about Bluevine, though, is that it makes record keeping easy. Your checking account can connect to your QuickBooks Online account to ensure that when you pay vendors or transfer funds, it’s recorded. If you maintain a $250,000 minimum balance, you may also qualify to earn 2% interest.

Fees:

No service charge
No fees for overdrafts
No in-network fees for ATM use
Out-of-network fees for ATM use not reimbursed

Balance Requirements:

No opening deposit required
No balance minimums

Business-Friendly Features:

Earn 2% interest on balances of $250,000 or more with minimum monthly debit transactions
Integration with QuickBooks Online
Bill pay dashboard makes online payments easy

4. Capital One Business Basic Checking

Capital One is one of the bigger banks that doesn’t use ChexSystems for new account applications. This gives you all the amenities of a corporate bank without the strict application requirements. With a Capital One Business Basic Checking account, you get the benefits of in-person service at Capital One branches nationwide, as well as online banking services both on the web and in an app.

If you regularly deal in cash, Capital One may win out over other options. You can deposit up to $5,000 in cash each month for free, with each additional cash deposit only costing $1 per $1,000. The ease of being able to walk up to a teller can make the extra fees worth it.

Fees:

$15 service fee per month on balances of less than $2,000
$35 insufficient funds fee (can vary by branch)
Access to fee-free cash withdrawals and deposits at all Capital One ATMs nationwide

Balance Requirements:

No opening deposit required
No minimum monthly balance required

Business-Friendly Features:

Access to in-person service and fee-free ATM use at Capital One locations
Up to $5,000 in free cash deposits each month
Free ACH deposits and electronic bill pay through web and app
Overdraft protection with linked Capital One Business deposit account

5. SoFi Money

SoFi doesn’t have a dedicated business bank account option, but its general checking account could fill all your needs. With SoFiMoney, you get no-fee checking with up to 1.20% APY on your balance. The signup process takes minutes and requires no ChexSystems check.

One issue with SoFi Money, though, is that the benefits are designed for direct deposit. If your business doesn’t have electronic funds coming into your account regularly, some of the perks won’t apply to you.

Fees:

No service charge
No fees for overdrafts
Fee-free ATM access at 55,000+ Allpoint ATMs worldwide

Balance Requirements:

No opening deposit required
No minimum monthly balance required

Business-Friendly Features:

Bonus of up to $250 with direct deposit
Access to direct deposits up to two days early

6. FSNB

Originally created to serve the military community, FSNB or Fort Sill National Bank, has expanded to provide banking to the wider consumer market. There are branches across the eastern half of the United States, spreading from Texas all the way to Delaware.

If you can maintain a $100 monthly balance, you can avoid a service fee. You’ll also need direct deposit to qualify. The benefit of FSNB is that you’ll have access to local branches and ATMs, which will save on those fees, provided you have an FSNB presence in your town.

Fees:

No fee per month with direct deposit
$20 per item for overdrafts

Balance Requirements:

$100 to avoid the $6.50 fee each month
$5 to open a business checking account

Business-Friendly Features:

Savings round-up puts money in savings with each purchase
Credit-building credit cards available

Second Chance Business Checking Banks

In addition to deposit accounts with no ChexSystems scan in place, there’s another option. Some banks still use ChexSystems but are more flexible on the requirements. Those can fall under the header of second chance banks.

Second chance banks are willing to waive the ChexSystems clearance to issue either a personal checking account or a business checking account. Some of these banks also offer lower rates and balance minimums, so check with each bank to see if their standard terms can be negotiated.

1. Wells Fargo Business Checking

While Wells Fargo Small Business Checking runs accounts through ChexSystems, the lender has second-chance checking accounts that can help small business owners qualify. If you have a branch in your town, this could be the perfect option for your small business.

Wells Fargo’s accounts do come with fees, but you can avoid the $10 monthly fee for maintenance by maintaining a balance of at least $500. Provided you have an ATM near you, you can also save on cash withdrawals.

Fees:

$10 service fee per month for balances under $500
$35 fee for overdrafts
Free ATM access at more than 12,000 locations

Balance Requirements:

Minimum $500 balance to avoid a $10 service fee
$25 minimum opening deposit

Business-Friendly Features:

Brand your debit cards with customization
24/7 fraud monitoring and alerts

2. Woodforest National Bank

Woodforest National Bank started as a community bank, but it has grown by leaps and bounds in recent years. The bank has more than 760 branches in 17 different states, along with online offerings to go with it. If you live in one of those states, you can open an account and combine online banking with what you can do at a local branch.

Although Woodforest does have a second chance account, it doesn’t come with the amenities you’ll get from some online-only options. Woodforest charges a monthly fee, as well as an account setup fee and a fee for overdrafts.

Fees:

Monthly fee: $9.95 with direct deposit or $11.95 without
$9 account setup fee
$32 overdraft fee
$2.50 fee for each use of an out-of-network ATM

Balance Requirements:

$25 minimum opening deposit
No balance minimum

Business-Friendly Features:

Free ATM use at Woodforest ATMs
In-person service at Woodforest branches

How to Recover From a Negative ChexSystems Report

If you’re denied credit due to a poor personal credit history, your first step should be to review your credit report. The same advice goes for your banking history. You can’t dispute items on your ChexSystems report as you could with an inaccurate credit report entry, but you can request that financial institutions make those corrections.

Request a Copy of Your Report

You can get one free copy of your ChexSystems Consumer Disclosure Report each year. If you’ve been denied an account, you can request a free copy even if this will be your second report this year.

If you’re curious about what might be on your report, you can view a sample report. It will show credit inquiries, check cashing inquiries, and security freezes. Financial institutions want to see your history of opening and closing accounts, as well as unpaid fees and negative account balances.

Request Financial Institutions to Update Their Entries

Financial institutions can withdraw negative information at any time. If you see something on your report that’s incorrect, reach out to the lender and ask that they make the correction. If you can’t gain traction from that angle, you can go directly to ChexSystems to get it corrected.

Dispute Incorrect Entries

Although ChexSystems encourages you to reach out to the bank or credit union first, they will contact them on your behalf if necessary. To start this process, first gather all the information you can to state your case. This can include:

Account statements
Police reports
Settled in full letters
Identity theft affidavits

Give It Time to Clear Your Report

The lender can request an entry be removed, but it may still take time. If you go through ChexSystems to dispute it, there will be an investigation. That process takes 30 days, but if you’re in Maine, it can be turned around in as few as 21 days.

Other Options for Banking Customers

Choosing from the best non-ChexSystems banks or second-chance accounts aren’t your only two options. There are a few other options to consider for your business checking account or savings account.

Local Banks and Credit Unions

Corporate lenders typically have policies when it comes to approving customers for checking accounts. But you likely have a local bank in your community that can make decisions on a case-by-case basis. Many of these banks are dedicated to supporting the community, so being a locally-owned business can work in your favor.

Credit unions are another consideration. At one time, you had to be a member of a designated group, such as the military or a vocational group, to qualify, but today, many credit unions are available to everyone.

Here are some credit unions that don’t use ChexSystems to qualify new account holders.

Navy Federal Credit Union: Navy Federal doesn’t use ChexSystems and offers a small business bank account with no monthly fee and 0.01% APY on your balance.
Southwest Financial Credit Union: This Texas bank has gone 100% virtual, and applicants aren’t passed through ChexSystems for approval. You can choose from a variety of checking account types, including free checking and high-yield checking.
Unify Financial Credit Union: With locations in 17 states, this credit union waives ChexSystems checks on account applicants. The Right Start Checking account is designed for those who are new to banking or need to rebuild a positive checking account history.
Hope Credit Union: If you’re in the South, Hope may have a branch near you. There’s no ChexSystems check to apply, and you’ll enjoy 3.00% APY on your checking account balance. The account also comes with no service fees and no minimum account balance.

Secured Credit Cards

Although you’ll likely need a checking account to qualify for any credit card, if you have a poor personal credit score, it can help get you on the right track. With a secured card, you pay a deposit that “secures” the money you spend on your card. Then, as you swipe the card to pay for purchases, you start building a history that will help you qualify for credit in the future.

Here are a few secured credit cards you can get without a bank account:

OpenSky Visa: With no credit check required, this card is ideal for those without checking accounts. You’ll need to pay a $200 deposit, which you can pay by money order or a Western Union funds transfer.
First Progress Credit Cards: First Progress has three credit cards for those who have poor credit. Each card requires a deposit of at least $200, which you can pay using a prepaid debit card.
Self Credit Builder Secured Visa Credit Card: This card goes with a Self Credit Builder account. With each payment you make, you’ll be working toward improving your credit score. You’ll need to first have a Self Credit Builder account and demonstrate that you’re an account holder in good standing.

See also: Best Secured Credit Cards of 2023

Prepaid Debit Cards

As payment technologies have advanced, it’s become harder to pay using only cash. The good news is, there’s a lot you can do without a bank account, including purchasing prepaid debit cards. You can use a prepaid debit card at cash registers and online, with the merchant seeing it no differently than if you’d used a debit or credit card.

With a prepaid card, you can hand over cash in exchange for a physical card that you use for online or in-person purchases. You can buy prepaid cards at most grocery stores and drugstores, then reload it with cash as needed.

See also: Best Prepaid Debit Cards of 2023

Payment Apps

Yes, you can sign up for some payment apps without a bank account. PayPal and Venmo will both allow you to sign up without a card. The problem is, if you want to send money to someone, you’ll need to actually have money in the app first. There’s no external payment source to move funds back and forth.

That’s where a prepaid debit card can come in handy. You can add cash to the debit card in person, then link that card to your payment app to make payments. This will cover you for those situations where you need to send money to a friend or you want to buy something online without giving your debit card number.

Taking a look at your ChexSystems disclosure report can help you determine whether you’ll face challenges when you apply for a business checking account. If you see negative items, though, you can find a bank that is more flexible in qualifying applicants so that you can start rebuilding your banking history.

Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.

1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

2. Early access to direct deposit funds depends on the timing of the submission of the payment ﬁle from the payer. Chime generally make these funds available on the day the payment ﬁle is received, which may be up to 2 days earlier than the scheduled payment date.

3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May, 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.

8. A Chime Checking Account is required to be eligible for a Savings Account.