Chexsystems banks by definition means individual banks that have elected to become a part of Chexsystem’s extensive network of financial institutions helping each other avoid credit risk customers and bad investments. These banks as a whole comprise a monitoring network that reports fraudulent activities in their individual premises. What happens is that the people who try to game the banking system or have shown suspicious activity in the past are listed on Chexsystems through these financial institutions.

Individual banks are the ones that decide who gets listed on Chexsystems, but the thing is, all the banks have access to the list and are actively using it to look out for potential customers that could have been blacklisted by other banks.

If you’re on ChexSystems, you may find your account closed the next morning. Moreover, you might find yourself unable to open another account in another bank. When someone attempts to apply for a new account in a member bank, an inquiry is made to Chexsystems, and the data of that person’s banking background comes up.

The worst part is that once you become one of the 8 million or so Americans on the Chexsystems “black list”, your data stays in their database for 5 years. This means you may not be able to open a regular banking account during this time, especially if the bank you want to do business with is under the Chexsystems umbrella.

How can you check if you’re on Chexsystems? You can order a consumer report and find out if you’re in the blacklist. You can skip this part and simply think about your past actions. Have you ever made frequent overdrafts? Have you ever misused your ATM card? Were you ever involved in identity theft? Is your credit score low? Once you’ve answered these questions, the next step is to apply for a new checking account with a bank that you know is using Chexsystems. If you get rejected, then you may have been listed.

Not all those who are on Chexsystems are involved in fraudulent practices, but banks hardly investigate further. Even if you just landed your spot on Chexsystems because of bounced checks, you will get blacklisted along with other felons who intentionally try to game the banking system.

Being listed on ChexSystems can be a major pain. You won’t be able to use checks to pay for bills. You will have to make do with money order or cash. What if your employer sends you checks as payment? You will not be able to cash them because you don’t have a bank account.

The good news is that you’re not totally devoid of hope. There are things you can do if you get denied by a Chexsystems bank.

Try to remove your name from the ChexSystems black list. It’s obvious that this is the first thing you should try. ChexSystems is a Consumer Reporting Agency, and is thus under the Fair Credit Reporting Act (FRCA). This law can benefit you in case you want to have your name removed from the black list.

First, get a copy of your consumer report and look for any errors. Then, if you find inaccurate information, you can ask Chexsystems to re-evaluate your report. If your information cannot be verified, they have no choice but to remove the information. You can keep doing this for every mark on your record that’s misleading and erroneous.

Look for Non ChexSystems banks. There are banks that don’t use the Chexsystems reporting scheme. While it may require a bit of effort on your part, it’s not impossible to find a bank that doesn’t follow the Chexsystems list.

While the majority of banks within the Chexsystems umbrella prioritize the lessening of credit risks, some banks actually look at each individual’s record and do not automatically deny an application. They will allow you to open a new bank account if you provide a statement explaining your case. You may be subjected to additional terms and conditions, but if you’re determined to start anew, it’s a small price to pay for a legitimate checking account.