I write a lot in this blog about credit reports and credit cards, but I haven’t written about something that’s just as important as a clean credit report before—a clean ChexSystems report.  ChexSystems is a consumer reporting agency, just like the credit bureaus, that tracks your deposit accounts, like checking and savings, with banks.  A ChexSystems report is to your checking history as a credit report is to your credit history.  They track all negative deposit account activity such as overdrafts, negative balances, and fraud for the past 5 years, as well as mundane activities like account freezes, checks that haven’t been cashed, and check orders.  So just like a bank will pull a credit report to see how you have done in the past managing other loans, they’ll pull your ChexSystems report before allowing you to open a checking account to make sure you don’t have a history of writing bad checks or committing fraud.  Banks take negative ChexSystems reports extremely seriously and will typically reject an applicant if they have even one negative mark on their report.  This creates a snowball effect—no checking account means you won’t be able to open most credit accounts, secure an auto loan, qualify for a mortgage, etc.

The good news is ChexSystems is regulated by the FCRA, the Fair Credit Reporting Act, just like the credit bureaus are.  That means a bad ChexSystems report can be fixed.  ChexSystems allows a consumer to get a free report from them annually or after a consumer has been denied an account.  If you’d like to get a copy of yours, you can click here to order one directly from ChexSystems.  Just like a credit report, if you find items on your report that are inaccurate you can request that they be investigated.

Feel free to give us a call if you need help getting your ChexSystems file straightened out, we have extensive experience with them just like we do with the credit bureaus.  We can also put you in contact with several banks that we have relationships if you’re having trouble getting an account.

Treasury Secretary Timothy F. Geithner, speaking at a small-business financing forum at the Treasury Department, called on banks to “get back to the business of lending.”

The Treasury Department released a report earlier this week showing that many of the banks that received government aid in the form of stimulus money earlier this year continue to tighten credit. Loan originations in September fell 6 percent at Bank of America and 14 percent at Wells Fargo compared with the August.

Geithner went on to state that when banks rein in their lending it is the small businesses that are hurt the most since they rely on banks for 90% of their lending, versus large corporations that only get 30% of their loans from banks. “Banks bear some responsibility for the extent of the damage caused by the crisis, you carry a substantial obligation to help our communities get back on their feet.” he told the banking representatives.