Best Banks That Don't Use ChexSystems

Written by Robert Ferry on November 8, 2021
Best Banks That Don't Use ChexSystems

Money is an essential tool to make purchases in our daily lives. We tend to buy the things we need and avail services that will make our lives more efficient. Money is a fundamental instrument that revolves around every transaction we make by reaching out to businesses.

Nowadays, money can be in the form of cash, digital currency, and online platforms. It is essential to save and store our money to be taken care of while earning some interest to let it grow.

Several people invest their money in stocks and businesses and keep it in banks to make interest annually. People are guaranteed that most banks are safe and will help them grow their money gradually.

The importance of having a secured bank is very fundamental. In today's time, for a specific bank to let you continue your membership with them, you must have an excellent financial history.

Having a perfect financial account will help you retain your good bank and credit status because in cases where you do not have a good credit standing, some banks may blacklist your checking account. These banks are considered operating relative to Chexsystems. That is why it's essential to know that having a bank that does not report to Chexsystems might be beneficial to maintain your bank credit account.

Banks that use ChexSystems are those who can cancel your account and deny you a checking account anytime due to lapses you have made. ChexSystems is a credit reporting agency that collates all the banking information of checking and savings from credit unions of those who have bad credit. This institution uses collated information to screen the creditworthiness of potential clients.

ChexSystems is like the major credit bureaus such as Experian, Equifax, and TransUnion, except that it dwells more on the negative or poor credit history.

Most banks that operate with this system blacklist bank records that can stay up to one's credit history for five years, and opening a simple checking account is almost impossible.

Fortunately, other banks do not operate with ChexSystems and can give people the opportunity to open a "Second-Chance checking account." From the name itself, it allows people with poor credit history to still open an account in cases where they have been blacklisted by banks that operate with Chexsystems.

We will further know the best banks that don't use ChexSystems and will give you the best options to start anew if you are planning to open a new account after being canceled by some banks.

Top 10 Best Banks that Don't Use ChexSystems

If you are worrying that your credit and savings account is getting blacklisted because of your poor credit history. You might consider being part of those banks that are not supported by ChexSystems.

Here are the following banks that do not use the ChexSystems:

1. Chime Bank

This bank is rapidly growing and is only accessed online. Since this is just a new bank, the primary tool to access it is smartphones, and there is also an application where people can view their accounts quickly.

Chime Bank is a very friendly bank since it allows everyone to apply with them. Even if your account has been blacklisted by banks that operate under ChexSystems, people with bad or poor credits can still use it. This bank can guarantee you that they will accommodate your applications online. The following are some of the features of this bank:

  • No monthly charges
  • No monthly service fee
  • Free debit 
  • No payment using mobile banking
  • Rounds up to the nearest dollar automatically in every purchase

2. Wells Fargo Bank

If you are unable to open a checking bank account because you have had a bad credit history, then Wells Fargo Opportunity Checking Account might be your option. This company released their new platform named Clear Access banking that only allows debit card accounts. 

You just need to have an initial deposit of $25, and the best thing about this bank is that you do not need to have a minimum balance. If you have maintained a minimum balance of $1,500 and you will be exempted for a monthly fee of $10. For members under 24 years old, the maintenance fee of $5 has been waived, and their service is available to 50 states in America. The following are some of the traits of this bank:

  • An initial deposit of $25
  • Online access of bill and online app
  • Free Visa debit card
  • Zelle- a platform for sending and receiving money
  • One of the leading banks in the US
  • Zero Liability Protection
  • Debit Card Protection

3. First Convenience Bank

First Convenience Bank's most popular account is the Power Checking Account. Cardholders must have an initial deposit of $20 to acquire an online account. However, if you open an account in person, you do not need to have an initial deposit. 

If you are 55 and above, you don't need to pay $12 for maintenance fees. If you have a daily amount of $100 in your account, the maintenance fees will also be waived. The following are some of the features of this bank:

  • Free withdrawals and money transfers for savings accounts
  • Allows a cardholder to open different types of accounts (savings, checking, and money market.)
  • Higher deposit equals higher interest rates
  • Possibility to waive monthly fees

4. Navy Federal Credit Union

The first thing that you need to be informed about this bank is that it is open for active or retired personnel in the military as well as veterans. In addition, this bank is also for personnel in the Department of Defense as well as their family members. This bank does not utilize ChexSystems in denying and approving the checking accounts of its members.

Navy Federal Credit Union has an estimated 350 branches and 30,000 ATMs without transaction fees. There are also at least five checking account choices based on your balances. The following are some of the characteristics of this bank:

  • No minimum deposit required
  • No minimum balance required
  • If you have a daily balance of $ 1,500 or more, the $10 flagship checking fee will be waived.

5. Varo Bank

Varo Bank can only be accessed through the internet and the use of smartphones. This bank is considered one of the best credit unions with convenient fees and charges for transactions. The following are some of the attributes of this bank:

  • No minimum balance required
  • No monthly maintenance fees
  • No foreign transaction and transfer fees
  • No cost for debit card replacement
  • Has payroll notification before salary day
  • No overdraft fees

6. SoFi

If you are searching for banks that have no ChexSystems, Sofi bank is the bank for you. SoFi is an online cash management account, so you can be sure that it does not operate under the system because it's not a bank. If you own a balance of more than $500, Sofi bank will allow you to earn 0.25% APY. The positive thing about Sofi bank is that it is FDIC insured. The following are some of the qualities of this bank:

  • No monthly maintenance fees
  • No minimum deposit required
  • No minimum balance required
  • ATM transactions are all free

7. Credit Union One

Credit Union One is located in Michigan, and this bank allows you to open a non-credit check account. In order to help clients to have a fresh start, they created the Basic Checking account. These are some of the traits of this bank:

  • For direct deposits, there is a monthly fee of $10 to $15
  • There is a $25 minimum deposit
  • No minimum balance required
  • There is a reward system that allows you to earn 1 point for every $3 spent, merchandise, gift checks, cash, as well as travel miles.

8. US Bank

If you have had issues with banks that operate under ChexSystems, then you might also want to know about US Bank. This bank has a Safe debit account which is considered a check-free account. They also have more than 3,000 branches which makes it more convenient to have. This bank allows people with not-so-perfect banking history to apply and also helps to restore credit scores. Here are some prominent features of this bank:

  • A monthly maintenance fee of $4.95
  • A minimum deposit of $25 
  • No minimum balance
  • Gives Visa debit card 
  • No overdraft fees

9. SunTrust Bank

SunTrust Bank is one of the most accessible banks to apply to. This bank allows costumes to quickly open an account, and there are various ways in which monthly maintenance fees can be waived. It is friendly for students and customers who have a direct deposit of $500 since they do not charge them anymore.

In addition, monthly maintenance fees are also waived for those customers who are making more than ten transactions a month. Here are several of the prominent features of this bank:

  • Waives the monthly maintenance fees
  • Requires a minimum deposit of $100
  • Convenient and user-friendly for students
  • Suitable for people with poor credit history

10. First American Bank

First American Bank is a banking and credit service that operates in Florida, Illinois, and Wisconsin. This bank gives their customers free digital statements that are beneficial. There is no minimum deposit required. Here are some of its prominent features:

  • Waives monthly maintenance fees
  • No minimum balance required
  • There is a need for a minimum deposit of $50
  • Free online and mobile banking
  • Provides digital statements of account
  • Free ATM transactions in more than 55,000 branches

How Does ChexSystems Work?

Based on the information released by the National Consumer Law Center, if an individual wishes to apply for a banking institution, his credit history will be reviewed by a credit union using ChexSystems. The majority of the financial institutions use the history of consumers coming from institutions that utilize ChexSystems to aid them in deciding if the applicant will be approved or not.

In applying for a credit card, the screening process is fundamental. The card providers go to one of the major credit bureaus to screen the credit history of the applicant in order to thoroughly check the credit status. This way also helps the card provider to know if the applicant is a responsible payer and trust that he would be obliged with his financial responsibility. Before you apply for a credit card, it is essential to monitor your credit scores as they will also look upon it as one of the basis if you are approved or not.

Various banking institutions and credit unions exchange information about applicants so that they know the actual score of the applicant and their credit history. They will know whether a particular bank deactivated the applicant's account due to poor financial habits and other information related to that. In line with this, the agency will collate the information given to them to create risk scores and will go to the banking institutions to present these reports in order to be a basis for the application of an individual.

Below is the information that ChexSystems provides to credit banks:

Credit Report

This report shows the history of the consumer, such as the bounced checks and unpaid fees and charges. The credit report also displays the credit concerns and check orders. This information can help banks to identify the financial activities being done by applicants in order to fully understand how well they take care of their economic history.

Of course, if the credit union sees that the applicant is not that responsible for settling his credits and payments, there will be a huge probability that he will not be approved of this credit and bank application.

Risk Score

This is a basis that ChexSystems uses in order to identify consumer scores which range from 100 to 899. If you are one of the best customers, your scores will be high. The higher the score, the higher the chance that you will be approved. 

Requesting your own credit score and report is relatively significant, but most people ask for their ChexSystems record instead. In this way, they can monitor their credit scores, and they can also know the reason why a bank rejected them if they applied for them. This ChexSystems report can be requested once a year.

If you also want to ask for your account online, you need to sign the nondisclosure agreement in this bank. After five days, you will receive your report through the mailing system giving full access to an online checking account. The Chexsystems relatively dwell on the negative aspect of your credit history.

What are the top Advantages of Banks that do not Utilize ChexSystems?

If you are someone who is planning to apply for a new or another checking account, but your negative credit history before is holding you up, then you might consider applying for banks that do not use ChexSystems.

Since having a checking account poses advantages in your credit history, you might also look at banks that are friendly to consumers, generous, and those that do not use ChexSystems. These banking institutions also possess other benefits and features that you cannot experience with some other top banks. The following are the benefits of using a bank that does not use ChexSystems:

Having a bank that does not use ChexSystems will also keep your money in a top safe place.

If you have a bank account in these types of banks, it will keep your hard-earned money safe and away from scams. Aside from that, you can monitor every transaction you have since you can review your monthly statement. It is also convenient to view your transactions through mobile banking.

Lower fee on cashing check services for an online checking account 

If you use banks that do not use ChexSystems, you can save some pennies since they charge less as compared to other banks. This is a good thing since most people tend to encash checks in their accounts.

Money is insured and protected in the best possible way

If you are banking with financial banks that are a partner of FDIC, you are assured that your money is insured and protected. Make sure to also find banks that are FDIC insured so that you will have financial peace. 

Low fees for prepaid debit card

One of the alternatives to a checking account is prepaid debit cards, and some have high monthly charges. Another prepaid debit card also has transaction fees, so it is still better to use banks that do not use ChexSystems, unlike a prepaid debit card, in order to have fewer fees.

Protection against fraud and scams

Engaging in banking institutions that do not use ChexSystems may also guarantee you that they are safe from fraud and scams because they have this fraud protection system.

Other Good Options other than Banks that do not use ChexSystems

If you have applied numerous times to acquire a banking institution that does not use ChexSystems but to no avail and you still can't successfully qualify, then you might consider taking other options.

The best thing is that you can still have other options but also make sure to not forget the advantages and disadvantages of each alternative. Here are the following alternatives other than banking with institutions that do not use ChexSystems:

Prepaid Debit Cards

As mentioned above, these cards are a good alternative and are pretty similar to a typical debit card. The only difference is that here, you need to pay the monthly fees, unlike the debit card. In order to cash in, you need to go to a retail store or other stores, and you can also cash in online. There are also some fees when you cash in related to the use of prepaid debit cards but usually minimal only.

Foreign Bank Accounts

It may sound very complicated, but you also have the choice to open a bank in another country. Yes, you heard it right. This can also give you the benefit and approval of your requirements. This bank allows you to open bank accounts in a different currency and country.

Secured Credit Cards

We all know that there are two types of credit cards, secured and unsecured. The unsecured banks do not need an initial deposit, while the secured need an initial deposit. The secured credit cards require you to put money in your account as a security deposit. These cards are the best because they can improve your credit history and scores, plus you can be guaranteed that your account is safe.

Second Chance Checking Accounts or Opportunity Checking

If you ever had a bad credit history, there are some banks that offer second chance checking bank accounts that allow you to start anew. These banks give you the opportunity to restore your account even if you had a poor credit history before. Some of the banks are actually big and popular, like Bank of America and Wells Fargo.

Online Services

There are various e-wallet services that allow you to store and save your money online, such as PayPal, ING, and Payoneer. Some of these banks also give you a debit card if you qualify. However, the downside of these banks is that they are not FDIC-insured, unlike the traditional banks that have physical branches. It is better if you will study the features of these banks before storing your money there.

This type of financial service has become widely known and used since people often use digital devices such as phones, tablets, and laptops. It is also convenient to use even if people are far away since they can transfer money everywhere but with corresponding fees. 

Difference between Non-ChexSystems Banks and Second Chance Banking?

We have heard about the second chance checking bank accounts earlier, and we may also draw questions about its differences with banks that do not utilize ChexSystems. Second Chance checking is accounts that give a chance for people with bad or poor credit history to restore their credit records. The thing is that second chance bank accounts might still use the ChexSystems, unlike the non-ChexSystems banks. 

When it comes to fees, the second chance banks account have fees such as the monthly maintenance payments, while the non-ChexSystem banks have very minimal fees. The second chance bank account does not also have a reward system; thus, you cannot earn points and incentives in every purchase that you have.

For consumers with second chance bank accounts, they will be given a choice to convert their account into a regular account after years of being financially responsible and if they are paying their balances on time.

Frequently Asked Questions

Here are some FAQs and short answers about the best banks that don't use ChexSystems.

Conclusion

In an overview, we have learned that banks use ChexSystems in order to monitor those people who want to apply for checking and bank accounts.

Using this system, banks can reject those account holders who had a bad or poor credit history in their records. It is also their way to protect themselves from people who do not seem responsible when it comes to their finances and liabilities. The activities that this ChexSystems monitor is whether the consumer is not paying on time have numerous bounced checks, and also if he/she is paying maintenance, monthly service charge, and other fees on time. It is very unfortunate for those who had a bad record in the past that wanted to have a fresh start and to regain their credit scores.

ChexSystems, as mentioned earlier, is a credit reporting agency that collates all the banking information of checking and savings from credit unions of those people who have bad credit. This system uses collated information to screen the creditworthiness of potential clients. ChexSystems collates all the information of the consumer, including the credit report and risk score. This way, banks can monitor their credit scores, and they can also know the reason why a bank rejected them if they applied for them.

Most people do not like this system because it gives away their chance of restoring their credit scores. ChexSystems is like the major credit bureaus such as Experian, Equifax, and TransUnion, except that it dwells more on the negative or poor credit history. The best thing about this is that there are also banks that do not use ChexSystems nowadays. These banks offer the consumers the chance to apply and restore their credit score even if they had a poor credit history in the past.

The next question is what the banks that do not use ChexSystems are? There are top ten alternative banks that do not use ChexSystems; the first is Chime Bank, a very friendly bank since it allows everyone to apply with them and is accessed online. Next, Wells Fargo Opportunity Checking Account and First Convenience Bank's most popular account is the Power Checking Account. We also have the Navy Federal Credit Union, Varo Bank, SoFri, Credit Union One, US Bank, SunTrust Bank as well as First American Bank.

These are the best banks that don't use ChexSystems and give the consumer the chance to regain their credit scores and enjoy banking again. These banks have benefits, and the first is it keeps the money of consumers safe and away from fraud and scams. These banks have low fees.

If a customer does not want to apply for banking institutions, there are also other options such as Second chance banking, prepaid debit card, foreign bank accounts, secured credit cards, and online services like PayPal. There is also a difference between Second chance banking and non-ChexSystem banks. When it comes to second-chance accounts, even if it will give you the opportunity to get a good start in banking, it may still use ChexSystems and may even have fees.

It is essential to take care of our credit history or else it can also affect our future endeavors. If you have taken good care of your credit scores, you do not have to worry if you are going to apply for another account since a customer knows that their credit standing is not in a negative number. However, even if a customer has a poor credit history and they want to restore your account to the top, there are some top banking institutions that do not use ChexSystems and may give you another chance to build a new account.

If a customer ever gets an opportunity to open a new account, make sure to monitor their transactions and also to pay the charges on time so they will not reflect in their account. That way, a customer can apply for a new account with ease when the time comes that they decide to apply for one.

Article written by Robert Ferry

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