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WE’VE ALL HEARD of the three credit bureaus, Equifax, Experian and TransUnion, which compile our all-important credit reports. But have you heard of ChexSystems?
ChexSystems generates reports on bank customers, typically using banking history from the past five years to assess the risk that customers pose to their banks. Those risks are reflected in blemishes on a consumer’s banking history, such as overdrafts and unpaid fees. In some instances, ChexSystems warns banks about potential fraud. Never heard of ChexSystems? It’s probably because you don’t have a history of overdrafts or unpaid fees on your checking account.
If you’re like me, you’ve probably always assumed that getting a checking account was a simple matter of going to the bank and filling out an application. After all, you’re giving the bank your money. Why would the bank refuse it?
But it might.
Perhaps an unpleasant divorce led to negative account balances or involuntary closure of an account. Perhaps you owned a joint account with someone who wasn’t as careful. Perhaps you were hit with identity theft. Perhaps you made an honest mistake.
Did these affect your banking score? ChexSystems’ website is amazingly user-friendly. By completing a form on its site, you can get a report online or through the mail. You can also request a copy of your ChexSystems’ consumer score. There’s even a tab with resources should you suspect identity theft, including how to place a security alert or security freeze on your consumer report.
I tried to open a credit union account and was refused. I found out that they did not use Chex Systems, but used one of the credit reporting firms. I had the credit reporting firms locked to prevent fraud. I then went to another credit union and opened an account.
Another firm keeping tabs on us is LexisNexis. You can request a report from them.
ChexSystems had nothing at all about my own accounts. They did have a record of an account for a relative where I have power of attorney, no negative information.
In addition to Equifax, Experian and TransUnion, and the aforementioned ChexSystems, there are other bureaus that might be of interest.
Certegy keeps records of those writing checks and helps businesses decide whether to accept them from consumers.
Innovis is referred to as the “4th credit bureau” (behind the big 3 above) along with other ID verification data.
Clarity Services (owned by Experian) keeps data on alternative “subprime” type loans such as payday loans, title loans, check cashing, rent-to-own, etc.
CoreLogic Teletrack also does “subprime” financial services like payday loans, furniture financing, etc.
CoreLogic Credco provides merged credit files across multiple credit agencies (usually the big 3) to for things such as mortgages, auto loans, etc.
There certainly are a lot of players out there that can make the world either easier or more difficult for people!