If you’ve been reported to a consumer checking history database such as ChexSystems, you won’t be able to open a traditional checking account at a recognized banking institution. As I mentioned in an earlier post, consumers who repeatedly bounce checks, constantly overdraw on their accounts, or stop using an overdrawn account before they’ve paid off the negative balance will most likely be reported to ChexSystems by their bank. And that’s not a good thing. If you’ve been reported, you’ll be considered a liability. Consequently, you won’t be able to open a traditional checking account at any bank that is a member of the ChexSystems network for five years, which is how long a report submitted to ChexSystems remains in their files. However, if you’re in this predicament, you still might be able to open a checking account. A second chance checking account (also known as a fresh start checking account) is one way to do this.
A second chance account gives you another shot at opening a checking account. You can start your search by contacting your local bank and asking if they offer second chance checking accounts, and if not, where you can open one. In cases where you owe your bank money, you’ll have to pay the balance and show proof of payment before you can open a second chance account.
You might also be able to open an account with a credit union or a bank that is not a member of the ChexSystems network. If you remain in good standing with this type of account, it’s possible you might be able to open a traditional checking account within a year. One drawback with these accounts is that the fees tend to be higher and some restrictions may apply.
Another way to become eligible for a checking account is to sign up for a checking account education class to learn the basics of checking. You can sign up for classes through Checking Network USA. Banks who partner with Checking Network USA offer checking accounts to graduates of the program. Classes are conducted both online and in a classroom setting and those who pass a competency exam receive a certificate of completion. Know that once you’ve completed the course and opened an account you won’t be off the hook just yet. You’ll be subject to quarterly evaluations and account monitoring for one year. Contact Checking Network USA for a list of participating banks and for more information on this program.
Sheiresa Ngo is the consumer affairs editor at Black Enterprise.