If you have ever made a financial mistake in the past and it has hurt your credit score significantly, then you might find it difficult to open a checking account at a new bank in the future. Banks keep a tab on customer’s financial history’s using a program called ChexSystems. If you have a bad mark on your history, then it can keep you from opening a checking or savings account.
So to help you out, we put together this comprehensive list of the best banks that do not use ChexSystems. These banks are known as “second chance” banks and offer accounts for those who need a fresh start.
What is ChexSystems?
ChexSystems is a banking and consumer reporting agency that banks use when determining whether you can open an account. You can think of ChexSystems as a credit reporting system specifically for bank accounts. The ChexSystems network takes note of all your bad banking behavior, such as overdraft fees, late payments, and the like, and banks use that info to decide whether to give you an account.
ChexSystems is affiliated with Fidelity National Information Services and its services fall under the Fair Credit Reporting Act (FCRA). Information that ChexSystems looks for when putting together a report of your account includes but is not limited to:
- Closed accounts for cause
- Overdrafts/bounced checks
- ATM abuse
- Excessive account application
- Identity theft or fraud
- Negative balances
ChexSystems also have scores that range between 100 to 899. As is the case with credit scores, the higher the score, the less risk.
A poor ChexSystems score can keep you from getting an account, which can prevent you from doing a lot of other things like applying for housing, jobs, pay bills, and more. A bank account is practically a necessity in today’s world, so if you have a bad mark on your financial history, finding a bank that does not use ChexSystems can be beneficial.
Best Banks That Do Not Use ChexSystems
BBVA has an excellent affordable and flexible checking account with no monthly service charge or minimum balance. All accounts are FDIC insured and they will not pull a ChexSystems report when you apply for an account. BBVA accounts also come with a lot of free services and applications such as online banking/bill pay, mobile deposits for checks, a Visa debit card, unlimited paper checks, and more.
BBVA does not use Chexsystems but they use Early Warning Services, which will vet applicants for things like bank fraud or forgery. EWS does not check for a bad history of over drafting, so you shouldn’t run into any problems.
In addition to the mentioned services, a BBVA bank account has no ATM fees for other 64,000 nationwide participating BBVA. There is a $25 minimum deposit and a $3 fee for paper statements. You can also open a premium account for $19 a month which includes interest on your account, free paper statements, and 2 automatic ATM fee rebates every month.
In addition to personal checking accounts, BBVA also offers small business, commercial, and corporate banking accounts which include checking, savings, lending, merchant, and specialty program services.
2. First American Bank
First American Bank is a traditional banking institution with physical offices in Illinois, Wisconsin, and Florida, while also offering online servers to customers around the country. First American Bank has a Fresh Start Checking account, which has a $50 minimum deposit, a $10 monthly fee, and no minimum balance requirement. The Fresh Start account also has unlimited check writing, free e-statement, check images, a free debit card, and over 55,000 surcharge-free ATMs in their network. The FAB Fresh Start account does not let you accrued interest, however.
SoFi bank offers free checking accounts and does not use ChexSystems to vet customers beforehand. SoFi is an online-only bank so it does not have its own physical branches but they do share a network with over 55,000 ATMs country-wide so you can get no ATM fees. SoFi Money is interesting as it has interest, no account fees, and a bunch of other useful features for managing your money. Through SoFi money, you can get 0.25% APY with no monthly fees and up to $50K of funding through SoFi Investment accounts.
SoFi also has some good features to make things more appealing to those trying to rebuild their credit. They do not charge overdraft fees so if you try to spend money you don’t have, the transaction will just get canceled. SoFi Money accounts are also FDIC insured for up to $1.5 million, and it has up to 15% cashback rewards when you pay using the SoFi Money app. You can also deposit checks, freeze accounts or your card, get real-time alerts, and change your PIN, all from your phone and the SoFi app.
4. Chime Spending Account
Chime offers a spending account with no ChexSystems that allows anyone over 18 years old to easily get a checking account for making payments. Chime most of the amenities of a traditional bank account, including payments, a debit card, mobile deposits, direct deposits, transfer services, ATM access to over 38,000 machines across the country, and optional savings accounts. Also, chime stands apart in that it does not charge any monthly fees or overdraft fees. In fact, Chime will spot you up to $100 on card purchases without any overdraft fees.
Chime also recently introduced their new Chime Credit Card, a low cost method to build your credit. The card has no interest, no annual fees, and no credit checkers. Chime claims that its credit card can improve your credit score by an average of 30 points!
Lastly, Chime’s optional savings account offers 0,50% APY, a very high interest rate compared to most other modern banks. The mobile app is fast, responsive, and lets you set balance alerts and transaction alerts. Also, Chime accounts are FDIC-insured up to $250,000.
5. SunTrust Bank
SunTrust Bank offers ChexSystems free accounts, including an Essential and Advantage checking account. Both accounts have a $100 minimum required balance to open an account and both give you a loyalty cash bonus of 10%. The Essential account costs $7 a month, though you can get that monthly fee waived if you make more than 10 transactions per statement cycle, deposit more than $500 per billing cycle, or keep more than a $500 balance. The Essentials set also gets you a starter pack of 100 checks.
The Advantage account comes with a higher monthly charge but you also get interest on your accounts, ATM fee refunds, up to 4 additional Essential accounts, a $25 discount on any safe deposit box, and all wire transfer fees waived. The Advantage account usually costs $20 a month but you can get the monthly fee waived by depositing more than $3,000, maintaining more than $10,000 in balances, or have a linked SunTrust Business account.
6. US Bank
US Bank is one of the larger banks in the country and has over 3,000 branches nationwide. US Bank offers its Easy checking account that offers all the basic features you need from a checking account for the low price of $6.95 a month (or $0, with the fee waived). US Bank’s Easy checking account comes with a free debit card, online and mobile banking services, mobile check deposits, overdraft protection and transfers, and linked account capabilities. The Easy checking account normally costs $6.95 a month but you can get that fee waived if you have combined direct deposits over $1,000 for the month, have an average balance of $1,500 or greater, or are over the age of 65.
7. Acorns Spend
Second to last on our list is Acorns Spend, a nice cash management account that syncs with Acorns main investing platform. Acorns Spend is a checking account with a linked debit card that also interacts with your Acorns investment account. The Acorns Spend account has no monthly fees, no overdraft fees, a debit card, and free ATM access across the country.
Acorns also has its signature ‘round-up’ feature that will round up individual purchases to the nearest dollar and invest the spare change into your investment account. So if you pay $2.75 for a cup of coffee, Acorns will round up that purchase to $3.00 and put the extra $0.25 into your Acorns investment account. Acorns Spend also has digital direct deposit, mobile check depositing, and free bank-to-bank transfers. Acorns accounts are FDIC-insured for up to $250,000.
8. First Convenience Bank
First Convenience Bank is a branch of First National Bank of Texas and does not use Chexsystems for any of its 5 major accounts, including the Power checking, President Select High Yield Checking, eAccount, Power Stash, or Checking with interest accounts.
If you are trying to rebuild your banking history, then the Power Checking account might be your best choice. It has a $12 monthly maintenance fee and a $20 account opening fee but there are no minimum deposits required. Also, the bank will waive monthly maintenance fees if you keep a daily balance above $100 or if you use your debit card at least 8 times per month.
How to Fund a Second Chance Checking Account
Once you get approved for an account, the next step is to actually fund it. This can be a bit tricky to do if you have no other accounts active to make a transfer from. If the bank has a physical branch, then you can just go there to deposit a check or some cash into your account. If the bank is only online or you do not have access to a physical location, then you can fund it by mailing a money order, which can be bought at grocery stores, the post office, or several retail centers.
Why Use a Bank that Does Not Use ChexSystems?
If you have a negative banking history, then using a ChexSystems-free account can give you a way to rebuild your banking reputation. Bad marks on your Chexsystems banking reports can follow you for 5 years so, in the meantime, you will want a way to manage your money.
Having a bank account brings benefits that other kinds of money management services like prepaid cards or check-cashing services just cannot provide. A bank account can:
- Save on cashed check fees. Many check-cashing services have very high fees of up to $4 for every $1,000 cashed.
- Avoid prepaid card fees. Lots of prepaid cards have ATM fees, reload fees, and monthly fees. Banks help you avoid a lot of those charges.
- Keep your money safe. A bank account can protect your cash and is much safer than keeping it in your home or in a safe.
- Earn interest. Most checking accounts either have interest options or have related savings accounts for gaining interest. Interest lets you gain money over time just for having money in your account.
- Fraud protection and insurance. An FDIC-insured bank account will insure you up to $250,000 in losses in case the bank goes insolvent, and banks offer protection against fraud and identity theft.
- Other financial services. If you want to get something like a credit card or a home loan, then you most definitely will need a bank account to be eligible.
ChexSystems is a useful tool to make sure banks know who they are giving accounts to, but a bad banking history can put a black mark next to your name in the ChexSystems database for years. If you have had a bad banking history and are having trouble finding an account, then one of these bank accounts that do not use ChexSystems should work for you. These accounts will give you all the basic amenities of a bank account without the worry of being denied due to poor banking history. With a second chance banking account, you can start to repair your banking history and financial health.