As you launch, run, and expand your own credit repair business, it’s essential to continuously build your financial expertise in as many areas as possible to attract and retain new clients.
Educating yourself about all the factors that affect a person’s credit report empowers you as a business owner and trusted advisor. If you’re confident and knowledgeable about the credit repair industry and all of the influencing factors that contribute to a person’s overall credit report, you’re more likely to win the trust of incoming leads and better serve your active credit repair clients.
One of these important influencing factors that can have an impact on your clients’ overall financial wellness is their ChexSystems credit reports. Your credit repair clients may be negatively affected by their ChexSystem report and not even know it!
To put you in the best position to help your clients repair their credit, you need to understand exactly how the ChexSystems report affects their financial portfolio, as well as how it influences your credit repair business.
Let’s take a look at everything you need to know about your clients’ ChexSystems reports below.
What is the Purpose and Function of ChexSystems?
ChexSystems, opened in 1991, provides data about how consumers use deposit accounts. They are a consumer credit reporting agency (like Equifax, Experian, and TransUnion); the difference is that they track your client’s savings and checking accounts activity - not his or her credit card history.
In a nutshell:
- Equifax, Experian, TransUnion → track credit activity
- ChexSystems → tracks bank account history
If you want to hear it directly from the horse’s mouth, here’s how ChexSystems describes itself:
ChexSystems is a nationwide specialty consumer reporting agency under the federal Fair Credit Reporting Act (FCRA). ChexSystems' clients regularly contribute information on closed checking and savings accounts. ChexSystems' services primarily assist its clients in assessing the risk of opening new accounts.
Eighty percent of banks use ChexSystems to assess whether a person is an ideal applicant to open either a checking account or a savings account.
What is a ChexSystems Report and What Does it Tell You About Your Client?
Now that you have a better understanding of what ChexSystems does and the service it provides to nationwide banks, what exactly is a ChexSystems report?
A ChexSystems free report is essentially a summary of your credit repair client’s checking and savings account history and behavior over the past five years.
Which Data is Included Within Your Client’s ChexSystems Credit Report?
Beyond your client’s first and last name, this report will include:
- Your client’s past addresses
- Their Social Security number
- Their bank account history
The report will detail any irregularities, including:
- Bounced checks
- Overdraft charges
- Check fraud
- Suspicious account activity
Negative marks on your clients’ credit report from ChexSystems increase the likelihood that a bank will refuse your clients’ requests to open a new checking or savings account. Want to get a feel for what these reports look like?
View a sample Chexsystems report >
How to Get Your Client’s ChexSystems Report
Similar to a credit report, every one of your credit repair business clients is entitled to request one free ChexSystems report per year:
- Print this form and fill in with your client’s personal information
- Mail or fax the form to:
Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Fax: 602.659.2197
Looking for tips on how to interact with major credit bureaus on your client’s behalf? Check out the Credit Repair Business Owner’s Guide to Contacting Credit Bureaus.
Why is a ChexSystem Report Important to Your Clients’ Credit?
While your clients’ ChexSystems reports and overall scores will not directly affect their overall credit scores, it can affect your credit repair clients’ overall financial situation as a whole.
If one of your current or prospective clients is denied when requesting to open a checking or savings account, this likely means they have exhibited less-than-stellar financial habits in the past. And those unhealthy financial habits need to be corrected in order to repair their credit!
This directly affects your credit repair business.
A client’s financial stability and sense of financial confidence are negatively impacted when a bank rejects their request. This puts your client in a less-than-ideal position to pay off any outstanding debts.
The 411 on ChexSystems Inquiry Dispute Letters for Your Client
You and your clients have a right to dispute potential errors on their ChexSystems credit reports. If you think there may be an error, you or your client can contact the source of the information on the report (a bank or financial institution) or ChexSystems can contact them on your client’s behalf to investigate the negative mark.
Your client can submit his or her dispute here.
So let’s sum it up:
ChexSystems reports give an account of the past five years of all of your client’s checking and savings account activity.
A ChexSystem report does not impact your client’s credit score, however, it can put your client in a good or bad position to pay off their debts and repair their credit - so it absolutely impacts your credit repair business!
The best thing you can do as a credit repair business owner is to educate yourself about all things related to ChexSystems. If your current and prospective clients ask about anything related to ChexSystems, you’re prepared, you’re knowledgeable, and you’re ready to help them handle any related issues with their ChexSystems reports or ChexSystems dispute letters.
Explore related ChexSystems content to support your credit repair clients on their way to financial freedom.
How to write a ChexSystems Dispute letter >
