You probably have heard tell about the credit bureaus that keep a record of your credit card balances and history. But, in addition to the three major credit reporting agencies, did you know there are agencies that keep track of and report your banking history?

The official name of this report card on your bank accounts is “consumer banking report.” Banks and credit unions look at this report before they will allow you to open a new account.

(For a brush-up on account basics, see more see Demystification of Bank Accounts.)

Who Checks What

The two main consumer reporting agencies that track the vast majority of bank accounts in the U.S. are ChexSystems and Early Warning System.

When you apply for a new account, these agencies report whether you ever have bounced checks, refused to pay late fees or have had accounts closed due to mismanagement. In addition to your consumer banking report, many banks and credit unions also check your credit report to determine whether you’ve had a bankruptcy or have been convicted of fraud or identity theft.

It all makes sense. People who bounce a lot of checks likely haven’t paid bills on time either.

You Have Rights

You can effectively be blacklisted from opening a bank account through no fault of your own. Whether it’s with your consumer banking report or your credit report, information listed there can be wrong. Even if you have legitimate blots on your record, it’s important to know how your data is tracked and what you can do to fix a mistake or repair a bad history.

Under the Fair Credit Reporting Act (FCRA), you have the right to ask the bank or credit union which of the two verification systems they use. If a problem is found, you will receive a disclosure notice, likely informing you that you will not be able to open an account and why. At that time, you can request a free copy of the report that was the basis for your denial.

Federal law also allows you to request a free banking history report once per year per agency, at which time you can dispute wrong information and ask that the record be corrected. The reporting services also must tell you how to dispute wrong information.

To order your free banking history report from ChexSystems, click here. To get your free report from Early Warning System, go here.

What Is and Isn't a Problem

Chronically bouncing checks, not paying overdraft fees, committing fraud or having an account “closed for cause” can all result in a bank or credit union denying you a new account. Under FCRA, if your checking account was closed due to your mismanagement (that is, all the aforementioned things), that information can appear in your consumer banking report for up to seven years.

Don't worry about the occasional check returned for insufficient funds, though. According to the American Bankers Association, most banks will not report you if you overdraw your account, provided you take care of it within a reasonable period.

If there is nothing to report, that is good. In fact, that’s the best possible outcome. It means you have been a model account-holder at your institution.

Things You Can Do

Your best course of action is to avoid problems before they happen. Monitor your checking account and make sure you check the balance on a regular basis to avoid overdraft charges and fees. When they occur, make sure you have sufficient funds to pay them, the sooner the better.

If you are denied, ask the bank or credit union to reconsider. Sometimes the opportunity to speak with a bank officer is all it takes to get the institution to change its mind.

Open a savings account in order to build a relationship with the financial institution. Once you are able to get a checking account, it can be tied to this savings account to provide DIY overdraft protection. Of course, you can always arrange for overdraft protection through a line of credit or credit card, too; banks always love a client who purchases additional products.

Dispute incorrect information in your consumer banking report. It may seem obvious, but you should obtain your report, check it carefully and make sure it is accurate. If it is not, follow procedures to get it corrected and notify the bank or credit union. The Consumer Protection Financial Bureau offers sample letters to dispute inaccurate information in your history.

When you do contact one of the reporting agencies, be aware it may try to sell you other products. You are not obligated to buy them, and declining them should not affect the outcome of your dispute.

Things Not to Do

You may be tempted to pay a company to “repair” your credit or checking account history. Don’t do it. Most such companies are scams. Besides, if the negative information is accurate, the reporting services are not obligated to remove it for up to seven years anyway.

The only way it can be legitimately removed is if the bank or credit union that reported the information requests it. You might be better served trying to repair your relationship with the institution on your own.

The Bottom Line

So, what happens if you try everything, but the bank refuses to budge? Don't despair. Alternatives still exist.

Some banks offer alternative "cash-only pre-paid card" accounts for people who can't get traditional accounts. After a period of good stewardship, you may qualify for a regular account.

Many banks and credit unions offer other types of second-chance programs with restricted account access, higher bank fees and, in many cases, no debit card. If you are a candidate for a second chance program, make sure the bank is insured by the Federal Deposit Insurance Corporation (FDIC). If it’s a credit union, it should be insured by the National Credit Union Administration (NCUA).

Some banks and credit unions require you to attend a workshop in financial management before they will allow you to open even a second-chance account. But if your record was such that you couldn't get a regular checking account, a little education in money matters might not be such a bad thing.

For related reading, see Check Your Credit Report.

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