#1 Don't close any accounts that you currently already have!
You might rely on that account being there someday.

#2 Find a bank that doesn't use ChexSystems.
Most financial institutions (over 80% according to ChexSystems' own data) are now using ChexSystems, but some credit unions and a few smaller banks don't use ChexSystems when verifying new accounts. It is not easy, but if you try hard enough you will find one of that 20% which doesn't use ChexSystems.
We maintain a list of "good" banks which either do not use ChexSystems at all when verifying new accounts or will accommodate those with a negative ChexSystems record in some instances.

We are seeing a trend where some large national banks (Citibank, Bank of America, US Bank, etc) are starting to ignore incidents filed more than two years ago. This may have been a result of the Federal Reserve's inquiry into ChexSystems a while back and the publicity garnered by the articles in the Wall Street Journal. The challenge to making this work for you usually is to educate the accounts clerk or other bank representative about the changes that their headquarters has ordered, and to persuade them to investigate the changes for themselves.

Credit unions all have some eligibility restrictions -- either you need to live or work in a specific county or city, or need to work for a specific company or industry. This might appear to make credit unions off-limits to many people. Fortunately, there is a solution! Perhaps you have a family member who is eligible? Once a family member is a member, normally all in the immediate family (parents, children, siblings, grandparents, grandchildren, spouse, etc.) become eligible automatically. Even better -- once you become a member, you are qualified to keep membership for life. So if the family member wants to close his or her account, or you want to move or change jobs, your credit union membership is not affected. See CU Match Up which will identify credit unions to consider.

Credit Unions also are more likely to grant a savings-only account regardless of your ChexSystems record. See recommendation #4 for an explanation of why this may be all you need.

Skip the bank and go direct! If you have direct deposit, then you can get a debit card provided directly by ecount or Directo. For Directo -- you would want to contact your employer's Human Relations department to see if they use or will consider using Directo. The Federal Reserve is promoting Directo even.

Additionally, banks themselves are starting to offer these -- as reported in this April, 2002 article as well as this older August, 2001 article. The interesting item is that they are considering offering "convenience checks" for use at merchants where debit cards are not accepted for payment. That's more like it!

#3 Overdraft protection? Re-apply without it.
Sometimes people are denied an account only because they had indicated on their application that they would like the overdraft protection option. When your application includes this request, the bank will often verify your credit in addition to verifying your ChexSystems record. If you have both bad credit and a negative ChexSystems record, then the bank is more likely to reject your application. If this could be what happened, then you will want to simply leave off the overdraft protection request and re-apply.

But consider this: the computer systems used at some banks know if you've already applied recently, and will reject any additional applications automatically. This may be the case at just the one branch where you applied, or it may work this way at all of the bank's branches. At the same time, you need to be aware of the fact that each time a bank or credit union requests a copy of your record, that request is tallied at ChexSystems. If ChexSystems sees three or more requests in the past ninety days, then that fact alone carries the same weight as a negative "closed for cause" record.

#4 Open a Savings Account first.
Some banks don't check with ChexSystems when you are only opening a savings account. See our Hall Of Shame for a list of banks to avoid. Having a savings account makes many options available to you through services such as PayPal which use EFT (Electronic Funds Transfer) and ACH (Automated Clearing House) transactions.

#5 Closing Time.
Do you like working late? Neither does the accounts clerk at your bank. Arrive 10 minutes before closing time. Sometimes the person taking your application will cut corners and might skip the step involving doing a verification with ChexSystems. The smaller the bank, the more likely this will work.

#6 Request an "offline" verification.
When a bank verifies you using ChexSystems' online program, it is a "big net" type of search. Inform the clerk at the bank that you believe ChexSystems is mistaken, and that you wish to request an offline verification. The search to obtain your record in an offline verification is more specific as it is performed manually by a [generally quite stupid] human at ChexSystems instead of by a computer. Done this way it is more likely that your incident, or incidents of others whose names are somewhat similar to yours, will not be found. If you suspect that you have become a victim of identity fraud (e.g., your record shows incidents reported by banks that you've never done business with) then you can call the FTC Identity Theft Hotline at (877) 438-4338, and the Social Security Fraud Hotline at (800) 269-0271.

#7 Have your spouse apply separately.
ChexSystems may not be able to match both spouses to the incident. Have one spouse apply for an individual account (i.e., not a joint account) and leave out mention of the other wherever possible.

If denied, then go to a different bank or different branch, and have the other spouse apply for an individual account.

Then once you have an account and have a history with the bank, they might be willing to convert the account to a joint account -- even if the second person on the account has a negative ChexSystems record. (This technique works particularly well with online banks and the online units of traditional banks.) For the record, we do not recommend that anyone use joint accounts. It is just a bad idea.

Again, please keep in mind that each time a bank or credit union requests a copy of your record, that request is tallied at ChexSystems. If ChexSystems sees three or more requests in the past ninety days, then that fact alone carries the same weight as a negative "closed for cause" record.

By the way, a "donor" with a bank account can grant to you Power of Attorney which, after being notarized, can be presented to the "donor"'s bank and will allow you the ability to endorse deposits and sign checks on the account. There are significant risks to granting Power of Attorney so the donor may want to get legal advice and have these explained in detail.

On a related note ..., if you were reported to ChexSystems due to a problem with your spouse's account, and the account was NOT a joint account, then that is a huge, yet common, error made by the bank. Sometimes even a person who is listed as the "beneficiary" will end up, wrongly, being reported to ChexSystems. Should either of these situations happen to you, you will want to report this to the branch manager at the bank, to ChexSystems and most importantly, to the Federal Reserve Complaints Department as this practice needs to STOP NOW!.

#8 Whoooo Mexico.
Anyone with a Mexican ID (obtained from any Mexican Consulate in the U.S. or from within Mexico) can walk into any Citibank, Bank of America, Wells Fargo, or Chase Texas and open an account. Those with a Mexican Id will have no social security number. With no social security number, it is unlikely that the search with ChexSystems will yield any negatives (especially if the applicant has moved since any incidents were reported to ChexSystems).

#9 Oh, Canada!.
Open a U.S. Dollar checking account at a Canadian or foreign bank that operates in the United States. Often people will open an account in Canada before moving there so this practice isn't uncommon. Canadian Banks which will open accounts to United States residents are Bank of Montreal, Canada Trust, Scotia Bank, Royal Bank of Canada, Toronto Dominion, and Canadian Imperial Bank of Commerce (CIBC). You will need a U.S. driver's license or other state identification or a passport. Canadians use a social insurance number instead of a U.S. SSN (social security number), so you probably won't even be asked for your SSN.

#10 Government benefits? Request an ETA account!
Visit ETA-Find.gov to find a bank or credit union that offers ETAs (Electronic Transfer Accounts). Visit our ETA page which describes ETAs and how everyone might qualify.

#11 Learn to deal with it.
The suggestions listed above are the "quick fix" suggestions. If none of them are appropriate for you, then your remaining options will take significant time and effort. For instance, about a month will pass before you will get any reply when communicating by mail, fax, or over the web with ChexSystems. So it doesn't matter if the bank screwed up, or if the incident was a result of a stolen card, or whatever the reason -- you will need to deal with the fact that there is no solution that will get things cleared up immediately.

If you currently are stuck without an account and are unable to open a new one, then life will become a bit harder for you.

• Cashing your paycheck.
  Some people must resort to using check cashing joints where they pay 2% or more of their check just to get cash. But if you have access to the bank that your paycheck is drawn through, you can visit that bank and cash the check -- regardless of whether or not you have an account with them. Bring identification with you.

  You might also consider asking a friend or family member to cash your paycheck. However, most banks today put a hold on deposited funds for five business days as federal law provides, thus you can really cause problems for someone else by doing this.

  You will be carrying around a larger amount of cash than you are normally used to. Please realize the risks of doing this and take steps to protect yourself.

• Paying your bills.
  Money orders are available at the post office, banks, grocery stores, Wal-Marts, and check-cashing joints. Prices range from $0.46 each at Wal-Mart, to $0.80 at the post office, and as much as $2.00 to $5.00 each at your bank. Payment usually must be made using cash or ATM/debit card only as credit cards and personal checks are generally not accepted for the purchase of money orders. An additional type of check that is similar to a money order is the travelers check.

• Budgeting your money.
  Be prepared for problems by hiding away a cash reserve. Perhaps your paycheck will get lost in the mail, or your car will break down on the freeway. These things happen, and when you are working with cash only, these situations can become huge setbacks if you are not prepared.

#12 Amend your report.
Once you have a copy of your ChexSystems report, you will want to verify that any "banking institution incidents" have been amended to read: "all amounts owed have been paid". This is a a followup report that your bank files after an initial report to say that you no longer owe any money on the account. ChexSystems insists that all member banks are required to do this, but few banks ever do.

If this happens to you then you should contact the bank that reported the incident to ChexSystems and request that they file an update with ChexSystems to amend your incident to show that "all amounts owed have been paid" flag. You could also contact ChexSystems directly for your request to have incidents amended, but that approach takes significantly more time.

The reason you want to do this is because some banks will ignore your ChexSystems incidents, as long as that these incidents show this "all amounts owed have been paid" flag. After your report has been amended, then you can try re-applying or applying at a different bank.

#13 Negotiate a "deal".
If you still owe money to the bank that reported you, try using that for leverage! (i.e., "I will gladly pay you for the overdraft and any fees today -- if you agree to file a 'deletion' with ChexSystems!". Or perhaps you can ask for assurance that they will amend the incident with ChexSystems flagging it to read "all amounts owed have been paid".)

#14 Dispute the incident with the reporting bank.
Contact the bank that reported you and ask that they file a "delete record" request with ChexSystems. You will need to give a decent reason why they should go out of their way to help you -- i.e., "please remove the incident reported to ChexSystems by you as that occurred quite some time ago and was paid up soon after I was notified of the problem".

Even though a bank policy might be that only employees from their "loss prevention" department are authorized to contact ChexSystems, the fact is that ChexSystems will accept a call from any bank employee who knows their banks' "ChexSystems Security Code" and then the request for the deletion will be honored. So your goal should be to find a sympathetic ear anywhere in the organization who will call ChexSystems for you.

Remember one (sad) fact:
The squeaky wheel gets the grease!
If you did pay off the amount owed shortly after being notified, make sure to mention that fact. Also play off of their sympathy by explaining how no bank will open an account for you now. Remember, persistence pays ... and many people who put up enough of a stink do get listened to, and then the "deletion" gets submitted.

Here's a list of things to do:

A.)	Contact the BANK MANAGER at the branch that reported you and politely ask them to file a "deletion" with ChexSystems. This is more effective in-person rather than by phone.
B.)	If answer is no, wait 24 hours, then repeat Step A, giving more and more reason each time why you are right. Continue until successful. (but be careful -- this could border on telephone harassment.)
C.)	If the bank has multiple branches, ... move on and try the same technique on the next closest branch.

Remember another (sad) fact:
There is much misinformation about ChexSystems within the banking community and within ChexSystems itself. For face-to-face communications, consider bringing with you a notepad to take notes, and optionally a digital or tape recorder or even a radio transmitter (walkie-talkie). This generally puts them on the defensive as they will realize they cannot just make stuff up to get you out the door. Recording your telephone conversations with them (informing them ahead of time if required) may also work to your advantage.

#15 Dispute the incident directly with ChexSystems.
If you find any inaccurate information in the report you requested from ChexSystems, (e.g., "I don't remember having any overdrafts with this bank.") then you can send a signed, written letter to ChexSystems to dispute the incident. Be sure to send the letter via certified mail and request a return receipt, otherwise ChexSystems can (and often does) claim that a dispute was never received by them. The reason you want to dispute an incident is that hopefully ChexSystems will either agree with you and remove the incident, or the process of verifying the incident requires so much work that either the bank or ChexSystems will drop the ball, which will work in your favor. We've obtained a copy of the Reply Letter you will hope to get. Fact: ChexSystems sends this letter out a lot more often than you might think! (It is an indication of how inaccurate their data is.)

The Federal Trade Commission provides a sample letter showing how to write a dispute. You want to scrutinize your report as ANYTHING that is not accurate, like a date or an amount error, will make you eligible to file a dispute. ChexSystems is then required to get verification from the bank that reported you.

Bureaucracy is on your side here! If the bank takes longer than 30 days to reply, then ChexSystems is required to remove the incident from your report until the bank follows through. Banks absolutely hate having to verify ChexSystems incidents because it is time consuming and produces no revenue. Additionally, if your bank has been bought out or has merged, the effort they must expend to verify your incident can be tremendous -- especially if it was from several years ago.

ChexSystems will notify you of the results of the reinvestigation within approximately thirty days. If the bank responded, then Chex's results should include the name, address and phone number of the source at the bank who verified your incident. At least then you will know the correct person at the bank to contact. But if the bank never responds to ChexSystems, which happens quite often, then you are off!

If you wish, you can request that your dispute will end up being added to the incident, and each time the incident is read then your dispute will be read also. Depending on the circumstances, sometimes this helps your cause, other times it hurts.

(And remember -- it is expensive for ChexSystems and the banks to process disputes, but it costs you nothing. Get the hint???
And don't go with ChexSystems' claim that you need to send your dispute directly to the reporting bank first -- according to the federal FCRA you can send it right to ChexSystems!)

Also, if you are curious as to what type of people you are dealing with on the inside at ChexSystems then please read this message we received.

#16 Get into the (legal) ring.
Fact: Neither ChexSystems nor your bank wants to do battle with you in court. If you have any proof that the problem was due to a bank mistake, or feel that you would have a decent argument or just want to roll the dice and see if this option will get you out of Chex Hell -- then consider threatening to and/ or actually challenging them in court. Having a lawyer represent you really, really helps. But if you go it alone, here are some suggestions:

Firstly, get the name, title, address, and telephone number of the General Counsel (the lawyers) for the reporting bank. Notify them of your intention to escalate the situation (take them to court) unless they file a "deletion" with ChexSystems. Indicate clearly that your intention is simply to be able to open an account at a different bank and that the incident filed by your old bank is impeding you from doing that. In the letter, provide a date by which time you expect them to have complied with your request (be fair, like two weeks perhaps). Send the letter certified mail and request a return receipt.

If the bank does not respond, or replies that it will not file the deletion, your next step is to work on ChexSystems. You should first file a dispute with ChexSystems, if you have not haven't done this yet, and request that they verify the information in your file with the reporting bank. Upon verification (which can take up to 30 days), your next step is to inform ChexSystems that you intend to challenge their records. Send a copy of your letter (cc:) to the General Counsel at the reporting bank.

At this point, you will need to put on a lawyers hat, or preferably, get a lawyer to represent you. Your options include writing a few more letters (in hopes you can persuade either ChexSystems or the reporting bank to delete the incident), filing a civil suit, or filing a case in small claims court. This page alone lists a number of legal arguments that you can use -- including the most basic one which is to argue that the bank didn't follow "reasonable procedures" in reporting you to ChexSystems (e.g., the bank has no filing guidelines.)

#17 Take your complaint to the State.
If you aren't getting any cooperation, consider filing a complaint to the Attorney General in your state. Or if you really want to stir up the pot, find the individual at the Treasury who has oversight over your bank (scroll to the bottom of the list to see names for the larger banks) and remind them who they work for!

#18 Your identity varies. Make this work for you.
When you apply to open an account with a bank, they will provide information from the application to ChexSystems. This information includes your name, address, social security number (SSN), and often includes prior addresses, your driver's license number and date of birth.

A.) If you don't have an SSN (for example, if you aren't a resident of the United States, are a foreign student, etc.) then it is harder for ChexSystems to match you to your record. If you don't have an SSN and also your address has changed since the incident was reported, (especially, if you now reside in a different state), then it is quite likely that ChexSystems will not be able to identify you with your existing ChexSystems file. Just remember not to volunteer any previous addresses or other identity if you can avoid it -- all you should need is your passport and/ or international student id.

B.) Sometimes identifying information changes over time, which makes it harder for ChexSystems to match you against your ChexSystems record. (e.g., new address, new driver's license number from a state different from where the incident occurred, name change after becoming married.)

Perhaps you can take advantage of one or more of these holes in their system.

Following are some of the searches ChexSystems performs for banks who are inquiring on a new account application. See the Sample ChexSystems report to see how each is presented.

• Social Security Administration (SSA)
  ChexSystems runs your SSN against the SSA, getting simply a confirmation that the number is one which was issued, what state it was issued in, and approximately when it was issued. Visit the Informus site where you can enter a SSN and see this for yourself. For more information, see the SSN Structure page from the SSN FAQ.

  The SSN on your application is used not only to identify you but is also used when the bank reports interest income to the IRS. Thus if you provide a false SSN on your application it might not only become yet another negative mark on your record with ChexSystems if they find out, it could get you unwelcome attention from both the SSA and the IRS.

• Driver's License Bureau
  If the bank subscribes to ChexPlus, an additional service from ChexSystems, then ChexSystems will verify the driver's license or state identification number and then will look for information on you in their SCAN Retail Check Network. The driver's license or state identification number from your application is verified against records with the DMV in your state.

  Each state is different -- with most only verifying that the number is formatted properly. Other states, such as Texas, Florida, and Minnesota will return to ChexSystems the name, address, and date of birth registered under that number (although these states' DMVs might also give you the option of blocking this additional information from being released.)

• Retail Checking Network (Unpaid NSFs).
  Then if the bank is a ChexPlus subscriber, ChexSystems will run the driver's license number from the application against their retail check network SCAN which tells if there are any unpaid NSFs.

• Banking Institution Incident Reports
  When you have an incident reported to ChexSystems, the reporting bank gives ChexSystems your name, address, either your full SSN or the last four digits of it, your account number, and the reason for the report.

  The search is performed once for your SSN, and all incidents reported under that SSN will appear.

  Because many incidents reported to ChexSystems do not include the full SSN, another search is performed using just your name and address. Because of the high number of duplicates which appear, generally only incidents from the same state where you live will be considered from this search.

  Which means that when completing the bank application, you will want to volunteer no prior addresses or other historic information wherever possible.

#19 Make the bank want to keep you.
Banks don't make much money off of checking accounts with low average daily balances. Therefore, they don't really care if you stay with them or not. But if you invest in CDs or have loans with them, then you are valuable to the bank -- or more significantly, you are valuable to the bank's loan officers and financial consultants. So if you have time, and some money available, try this approach:

Purchase a short-term CD. Most banks offer CDs that mature within one month, or sooner, and require a minimum investment of about $1,000. Then when the CD matures, the bank's financial consultant will be your best friend -- someone who will do anything to get you to renew your CD. Perhaps this person will even intervene on your behalf and get that silly ChexSystems incident removed.

#20 Get checking through a Money Market or Brokerage Account.
A look at MSN MoneyCentral's Fund Directory or a search of Yahoo!'s Broker Directory might help you find several options.

None of the funds or brokers do, as far as we know, verify new accounts with ChexSystems. Many of these fund and broker accounts offer free or low cost checking and a low initial deposit. Most will even give you some type of bonus for being a new customer -- see this Sign-Up-Money page for details on that. Here are some specific places where your money is welcome:

• A Merrill Lynch CMA can be opened with $2,500 and reportedly does not involve any verification with ChexSystems.
• Prudential Securities apparently does not have a minimum opening balance requirement at most locations. For instance, the Prudential Securities offices in Clearwater, FL and San Diego, CA (on B' Street) were reported as location which require just $100 initial deposit and the ability to apply over the phone.
• interests us in that they too have no minimum balance. But we have yet to hear anything on them -- good or bad.
• TD Waterhouse lets you apply online for a brokerage account with a money market account option. This is the Broker Account, not the Checking Account through TD Waterhouse Bank (which does verify through ChexSystems). But you will get checks and an ATM/Visa card with the brokerage account -- as long as you choose to open the Money Market account on the application. Update: Reportedly, after one year TD does a review of your account and may cancel checking privileges if you do not stock transactions -- so keep this in mind.
• Charles Schwab locations do not check credit and the Schwab One securities account comes with a debit card and checking account. Unfortunately, we are told, it requires something like $5,000 to open.
• Franklin Templeton Investments has a money market account which reportedly has no verification with ChexSystems and includes a checking account. Please help us by letting us know what their minimum opening balance requirement is, should you learn it.
• Strong Funds also has a money market account which reportedly has no verification with ChexSystems. Again, please let us know what their minimum opening balance requirement is, should you learn it.

One important item, though, when relying on this brokerage account as your sole bank account -- make sure that the fund or brokerage will allow you to deposit your paycheck or other checks made out to you. If they don't, you may need to use an intermediary service that uses EFT or ACH to fund your brokerage account (see below).

You could also then use an online bill-pay service, such as PayMyBills.com and have funds drawn from your fund account. Additionally, the services such as PayPal which use EFT (Electronic Funds Transfer) and ACH (Automated Clearing House) transactions now become an option available to you also.

See the article Your Broker as Your Banker for further information regarding the use of a brokerage or money market account in place of a traditional bank account. The article is part of the informative Motley Fool's School of Banking site.

#21 Request the bank's filing guidelines.
One smart cookie wrote to us saying he was able to get his name removed by insisting that the bank provide to him their ChexSystems reporting policy in writing.
Update: Read this letter sent by someone who used this technique and found success!

Apparently ChexSystems doesn't dictate this policy, and most banks haven't designed one themselves, thus you are asking them to come up with something they don't have. But the FCRA has some specific words regarding "reasonable procedures" when reporting data to credit bureaus, and if the bank doesn't have any filing guidelines, then they really cannot prove that they followed "reasonable procedures" when they reported you to ChexSystems. This leaves them vulnerable to being sued because banks which don't follow reasonable procedures can be found liable for damages due to negligence. The bank might just decide that it is easier to file a deletion with ChexSystems than it is to deal with you any longer.

In your letter, you want to request the bank's "ChexSystems Reporting policy that complies with the requirements of the U.S. federal Fair Credit Reporting Act (FCRA)". State that unless they provide this policy, you would "have no choice but to retain a lawyer and have the lawyer secure such documentation."

Along the same lines (i.e., being a pain in hopes that they will simply give in to your request to file the deletion) you have the right to view the bank's Community Reinvestment Act file -- something they must show to you, at no charge, any time the bank is open. See our CRA page for step-by-step instructions. You probably won't win any friends in doing this, but that isn't your goal anyway.

#22 Investigate ChexSystems.
Most states require that a company register with the Secretary of State before business can be done in that state. Apparently ChexSystems forgets to do this. Virginia is one such state. A letter to the bank, with cc:s to ChexSystems and to the state's attorney general got one Chex Victim off the hook. Perhaps there are other angles too -- local or county regulations? Or Federal? Make red tape work for you!