Previous | The Secret To Avoiding Secret Shopper Scams Next | Student loans have a variety of repayment options
June 25, 2020 / Sarah Stansfield
Turned down for a bank account? This could be why

Turned down for a bank account? This could be why

By Sarah Stansfield, community office manager at F&M Trust’s Mont Alto office

If you have a history of overdrafts or, worse, if another financial institution closed your account, you’re probably going to run into some difficulties when you try to open another one. That’s because the financial institution that closed your account most likely reported you to ChexSystems, a national consumer reporting agency that provides information about the use of deposit accounts by consumers. Basically, the company keeps a record of individuals who have mismanaged their bank accounts.

file folder with the word deniedWhen you apply for a new bank account, most financial institutions check your banking history before approving your application. They want to see if you have a history of misusing your accounts — for example, bouncing checks or not paying fees. Mismanaging your checking account by bouncing checks can affect any financial applications. If they reject your application, that most likely means that they found negative information in your banking history, as reported by ChexSystems.

Here’s some of the information included in a ChexSystems report:

  • Personal information, such as social security number, names, date of birth, addresses, phone numbers and email addresses
  • Suspected fraudulent activity or identity theft
  • Returned checks reported by retailers
  • Involuntary account closure
  • Overdrafts or bounced checks
  • Unpaid negative balances or fees

ChexSystems retains a record of reported information for five years from the report date, unless the financial institution that reported the information requests its removal. A ChexSystems record does not affect your credit score.

If you’ve been denied a standard account, take heart: This is not the end of the road. You have other options, one of which includes a second-chance checking account, which can help you rebuild your banking account history. The fees associated with a second-chance account are generally higher than standard account fees, but using this account responsibly can get you back on track. If you can demonstrate your ability to properly manage your checking account for six months to a year, you may be able to graduate to a standard checking account.

You can request a free copy of your consumer disclosure report from ChexSystems here.

Recent Articles
Student loans have a variety of repayment options
Student loans have a variety of repayment options

Student loans have a variety of repayment options

November 23, 2023 / F&M Trust

Plan for the future when leaving your job
Plan for the future when leaving your job

Plan for the future when leaving your job

November 16, 2023 / Levi Crouse

How to spot and prevent financial abuse
How to spot and prevent financial abuse

How to spot and prevent financial abuse

November 09, 2023 / Ray Wills

What does America’s credit downgrade mean?
What does America’s credit downgrade mean?

What does America’s credit downgrade mean?

November 02, 2023 / Warren Hurt

Choosing the right self-employed retirement plan
Choosing the right self-employed retirement plan

Choosing the right self-employed retirement plan

October 23, 2023 / Chris Moore

What is PMI and do I need it?
What is PMI and do I need it?

What is PMI and do I need it?

October 16, 2023 / Dave Kuhns

Should I consider buying pet insurance?
Should I consider buying pet insurance?

Should I consider buying pet insurance?

October 09, 2023 / Jill Reddecliff

Frugality is a valuable financial tool
Frugality is a valuable financial tool

Frugality is a valuable financial tool

October 02, 2023 / Shelby Yinger

How you give is as important as what you give
How you give is as important as what you give

How you give is as important as what you give

September 25, 2023 / Matt Berger

Join our e-newsletter

Sign up for our e-newsletter to get new content each month.

NOTICE: YOU ARE LEAVING F&M TRUST!

You are now leaving the F&M Trust website. Links to third-party sites are provided for your convenience. Such sites are not within our control and may not follow the same privacy, security or accessibility standards as ours. F&M Trust neither endorses nor guarantees offerings of the third-party providers, nor is F&M Trust responsible for the security, content or availability of third-party sites, their partners or advertisers.