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Checking Account Credit Reporting Agencies

On Behalf of | Feb 7, 2017 | Consumer Protection

The average consumer has heard of the three major credit reporting agencies, Equifax, Experian and Trans Union.  These big three credit agencies are responsible for gathering, storing and reporting your financial information for creditors, lenders, employers and other entities that are allowed to view it.  But did you know that there are actually checking/banking account credit reporting agencies that are reporting on consumers as well?  Just like the three major credit reporting agencies, these checking account agencies are reporting on your bank account history.

ChexSystems and Early Warning Services are the two largest checking account reporting agencies that review your bank account history when you apply for a new account.  When you apply to open a new account, banks use reports from these two agencies to determine the type of customer you are and the type of account eligible to you.

ChexSystems and Early Warning Services report how you manage your banking accounts.  While theses agencies do not provide a credit score, they still function just as a credit reporting agency.  Like with Equifax, Experian and Trans Union, a consumer who closes accounts, fails to repay a negative account balance or is suspected of fraudulent activity on an account will receive a negative notation. However, unlike the other credit reporting agencies, ChexSystems and Early Warning Services only report negative information, including every banking error you have made in the past five years.

Banks and Lenders say that just being listed with ChexSystems or Early Warning Services can destroy your chances of approval for a bank account with most lending institutions.  Some banks however, choose to use a scoring system and depend on a credit reporting agency called QualiFile.  QualiFile, unlike ChexSystems and Early Warning Services, provides banks with a version of a credit score that helps predict what type of bank account holder you will be.

In the event you are declined from opening a bank account, the bank must provide you with the name of the agency it used in making its decision to deny you.  Order a copy of your report from that reporting agency.  You are entitled to a free copy of your report when you are denied credit.  Review your report for errors such as inaccurate information, a wrong account number or outdated account information.  Dispute inaccurate information with the reporting agency.  In the event the negative information is accurate, the good news is it only lasts for five years from the date of delinquency, instead of the seven to ten years like your consumer credit report.

If you have been denied a bank account or credit based on information in your credit report and would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.