Most negative information stays on your ChexSystems report for five years. That means an old checking or savings account problem can continue to affect new bank account applications long after the account itself has closed.
You don’t always have to wait five years to open another account. You may be able to dispute inaccurate information, and some banks don’t use ChexSystems at all. Here’s how long different records can stay, what happens if you pay what you owe, and what you can do while you wait for negative information to fall off.
How Long Does Information Stay on Your ChexSystems Report?
ChexSystems currently keeps reported information about closed checking and savings accounts for five years. Banks and credit unions may report accounts that were closed after problems such as unpaid negative balances or nonsufficient funds activity.
Not every type of information has the same retention period. According to a ChexSystems sample consumer disclosure report, these are some of the current timeframes:
| ChexSystems Information | How Long It Can Stay |
|---|---|
| Reported checking and savings account information | 5 years |
| Inquiries viewed by other companies | Up to 3 years |
| Check cashing inquiries reported by Certegy | 2 years |
| Retail information reported by Certegy | 4 years |
| Check order history | 5 years |
The five-year period is the one that matters most if a bank closed your account and reported negative information to ChexSystems.
When Does the Five-Year ChexSystems Period Start?
The five-year retention period applies to the information reported about the closed account. Your ChexSystems consumer disclosure report can show the date the account was closed, the reason it was reported, the original amount charged off, and the current closure status.
Paying an old balance doesn’t create a new five-year retention period in ChexSystems’ stated policy. Instead, the account can remain on your ChexSystems report with an updated status that shows the debt was paid or settled.
That distinction matters because paying a balance and removing a ChexSystems record are two different things.
Does Paying What You Owe Remove You From ChexSystems?
Paying an old bank balance generally doesn’t remove accurate information from your ChexSystems report before the five-year retention period ends.
ChexSystems states that a bank or credit union isn’t required to remove accurate reported information after you pay it. The financial institution does have to update the account to show that it was paid in full or settled in full when applicable.
That still makes repayment worthwhile. A bank that reviews your ChexSystems report can see that you resolved the balance rather than left it unpaid.
If you still owe money to a former bank and need somewhere to keep your money, see our guide on where to bank if you owe a bank money and can’t open a new account.
Can You Get Removed From ChexSystems Before Five Years?
Accurate negative information can generally remain in ChexSystems for the full five-year retention period. You may have grounds to get information corrected or removed sooner if it’s inaccurate, incomplete, outdated, or can’t be verified.
Common problems worth checking for include the following:
- Accounts you didn’t open: An unfamiliar account could result from identity theft or a reporting error.
- Incorrect balances: The amount shown may differ from what you actually owed.
- Incorrect payment status: An account that you paid or settled may still appear as unpaid.
- Duplicate information: The same account or event may appear more than once.
- Incorrect personal information: Names, addresses, account details, or other identifying information may be wrong.
- Old information: Information that has exceeded the applicable reporting period should no longer appear.
Don’t dispute accurate information simply because it’s negative. A dispute is meant to correct information that’s inaccurate, incomplete, or otherwise improperly reported.
How to Dispute Incorrect Information on Your ChexSystems Report
You have the right to challenge mistakes on your ChexSystems report. A successful dispute can result in inaccurate or unverifiable information being corrected or removed.
The dispute process generally works like this:
- Request your ChexSystems report: Get a current copy so you can see exactly what ChexSystems has on file.
- Review each entry: Check account numbers, financial institutions, balances, dates, closure reasons, and payment status.
- Gather documentation: Bank statements, payment confirmations, correspondence, and other records can support your dispute.
- Contact ChexSystems: You can submit a dispute through ChexSystems and explain what information you believe is wrong.
- Contact the financial institution: You can also dispute the information with the bank or credit union that supplied it.
- Review the results: Inaccurate, incomplete, or unverifiable information generally must be corrected or removed after the investigation.
Most disputes must be investigated within 30 days, although federal law allows more time in certain circumstances.
How to Get a Free Copy of Your ChexSystems Report
You can request a free copy of your ChexSystems consumer disclosure report once every 12 months. Checking your own ChexSystems report doesn’t hurt your credit score.
You may also qualify for another free copy after a bank or credit union denies your application because of information in a checking account consumer report. The adverse action notice should identify the consumer reporting company that supplied the information.
Review the ChexSystems report before you apply for another bank account if you’ve had trouble opening one. You’ll have a chance to find errors and see what a financial institution may see when it checks your banking history.
What Information Appears on a ChexSystems Report?
A ChexSystems report focuses on deposit account history rather than your history with credit cards and loans. It can contain information supplied by banks, credit unions, and other companies.
Depending on your history, your ChexSystems report may include:
- Closed accounts: Banks and credit unions can report checking or savings accounts that were closed after certain problems.
- Negative balances: An account may show an amount that remained unpaid when the account was closed.
- Nonsufficient funds activity: This can include problems tied to overdrafts or returned checks.
- Suspected fraud: A financial institution may report suspected fraudulent activity associated with an account.
- Payment status: A reported account can show whether the balance remains unpaid, was paid in full, or was settled in full.
- Inquiries: ChexSystems can show companies that accessed your information after you initiated a transaction or application.
- Personal information: Your ChexSystems file may contain names, addresses, phone numbers, email addresses, and other identifying information.
Your ChexSystems report isn’t the same as a credit report. Someone can have strong credit history and still have negative information in a checking account consumer report.
How ChexSystems Can Affect Your Bank Account Applications
Banks and credit unions can use ChexSystems when they decide whether to approve a new checking or savings account. A negative ChexSystems record doesn’t automatically prevent you from opening an account for five years.
ChexSystems provides information to financial institutions. Each bank or credit union sets its own account-opening policies and decides how much weight to give that information.
One bank may decline an application because of an unpaid account, while another may approve the same person for a standard or second chance checking account.
That’s why being in ChexSystems and being unable to get a bank account aren’t the same thing.
Bank Accounts You Can Open While You’re in ChexSystems
You don’t necessarily need to wait for a negative record to disappear before you get another bank account. Two common options are financial institutions that don’t use ChexSystems and second chance checking accounts.
Banks That Don’t Use ChexSystems
Some banks that don’t use ChexSystems don’t rely on a traditional ChexSystems review when you apply.
These accounts can include many of the same everyday banking features you’d expect from a standard checking account, such as a debit card, direct deposit, mobile banking, and ATM access.
Approval requirements still vary by financial institution. A bank that doesn’t use ChexSystems may use another method to review your application.
Second Chance Checking Accounts
Second chance checking accounts are another option for people with negative banking history.
Banks and credit unions that offer these accounts may accept customers who wouldn’t qualify for their standard checking accounts. Some second chance accounts charge monthly fees or have fewer features, so compare the costs before you open one.
Some financial institutions also let customers move to a standard checking account after they establish a positive account history.
Bank Account Options to Consider
Several financial technology companies offer accounts that may work for consumers who have had ChexSystems problems.
SoFi
- Up to $400 sign-up bonus with direct deposit
- Earn up to 4.40% promotional APY for up to six months for qualifying new members
- Over 55,000 fee-free ATMs
- Early pay with direct deposit
Current
- Build credit and earn points with every swipe
- No minimum opening deposit or maintenance fees
- Get paid up to 2 days faster
- No credit check or ChexSystems
Chime
- Up to 4.00% APY with Chime Prime on a high-yield savings account
- Over 47,000+ fee-free ATMs
- Up to $200 fee-free overdraft coverage
- Get paid up to 2 days early with direct deposit
How to Avoid Future ChexSystems Problems
Once you have another bank account, a few habits can reduce the chance that you’ll face another negative ChexSystems record. Pay particular attention to negative balances and accounts you plan to close.
- Track your balance: Set up mobile banking alerts so you know when your balance gets low or a large transaction posts.
- Resolve negative balances: Pay an overdraft or other amount owed as soon as possible rather than leave the account with an unpaid balance.
- Watch automatic payments: Recurring charges can push an account below zero after you think you’ve stopped using it.
- Close accounts carefully: Make sure all checks, debit card purchases, transfers, and automatic payments have cleared before you close an account.
- Keep enough money for pending transactions: Your available balance may not account for every transaction that hasn’t posted yet.
- Review your ChexSystems report: Check your information periodically, especially before you apply for a new checking or savings account.
Most reported checking and savings account information won’t stay in ChexSystems forever. The standard ChexSystems retention period is five years, and you may still have bank account options long before that period ends.
