When starting a small business, a never-ending list of things to do quickly overwhelms entrepreneurs. There is tons of legal paperwork to fill, besides setting up your business accounting systems. Perhaps opening a business checking account is the most challenging item in your to-do list. This account is important, particularly when you want to transfer money from checking account to prepaid card. A prepaid debit card makes it easy to pay bills and manage other financial transactions without constant trips to the bank. You probably know that banks run a report to determine your checking and savings account history. However, we will show you how to open a business checking account online no ChexSystems involved.
Opening a business account should be as simple as filling out an easy online. If you are reading this, nonetheless, you are probably among the unlucky few for whom the case was different. As such, if your business checking account application was rejected, chances are your ChexSystems report has an issue. So, what are you supposed to do? If anything, setting up a business bank account is one of the primary steps when starting your business. It is an essential step towards separating your business and personal finances. A business checking account is also vital when you want to send money with checking account number. It is an easier and time-saving transaction for paying multiple business bills.
If it has been difficult getting a business bank account and have been left browsing, “open business checking account online no ChexSystems”, we are here to help you. We are going to explain how the ChexSystems report impacts banking options for your small business, the right steps you can take to clear your name, as well as the options to open a business checking account online without involving the ChexSystems report.
How To Open A Business Checking Account Online With No Chexsystems
Before you try to figure out open online business checking account without Chexsystems, it is more vital that you know what the ChexSystem does, including how it works. Until you experience the forced closure of a checking account or denied application for the business checking account, many of us live our lives oblivious to ChexSystems. Despite that, you are probably aware of another financial reporting system working similarly, your credit report.
What is ChexSystems
Similar to how credit-reporting agencies such as Equifax, TransUnion, and Experian collect creditors’ information to analyze their creditworthiness when borrowing, ChexSystems works in the way, although for savings and checking accounts.
In simple terms, ChexSystems is a national consumer-reporting agency, tracking the misuse of savings and checking accounts for banks in the United States. Therefore, if you have a bank account in the US, or tried opening one, chances are the agency has your records in its database. However, ChexSystems typically lists negative information about consumers’ banking histories when reporting to banks and other financial institutions. The report includes repeated cases of insufficient funds, suspected fraudulent activity, failing to pay banking fees, and bounced checks.
How Does ChexSystem Work?
The National Consumer Law Center quotes 80% of banks use reports from ChexSystems when evaluating applicants’ new bank accounts. Many financial institutions also use similar consumer reporting agencies including Early Warning Systems and TeleCheck to access the same kind of information.
ChexSystems and individual financial institutions have a mutual relationship, in which the latter automatically reports relevant activity about consumer baking to the agency. In return, the agency gives banks access to its reporting database to enable the institutions to evaluate new applicants.
While multiple cases account misuse can cause your ChexSystems report to be flagged, here are the most popular entries that will limit your access to a savings or business account in future:
- Multiple overdrafts or cases of insufficient funds
- High rates of bounced checks
- Delayed or unpaid banking fees
- False information for opening accounts
- Fraudulent check deposits
- Failing to properly close previous checking accounts
- Using closed bank accounts to write checks
- Attempting ATM withdrawals from closed bank accounts
- Violating other banking regulations
Once notification of one or more of these account activities is sent to ChexSystems, it reflects on your ChexSystem report for a maximum of five years.
How To Clear Your ChexSystems Record
As a business owner, you do not want the looming impact of blemishes on your financial record holding you back. Due to that, the best course of action when facing a ChexSystem blacklist is to address it head-on. Before trying to go around your ChexSystems challenges, you should follow these steps to determine the reasons for those challenges and clear your name from the database.
Request Your ChexSystem Report
While you may have learned about your record with ChexSystems upon rejection of your business checking account application, the bank in question is unlikely to share the details of what was in your report. To help you understand what the bank is seeing, we recommend reviewing the ChexSystem report for yourself.
You are legally entitled to access a free copy of your Consumer Disclosure, once a year. Therefore, you can visit the ChexSystems website and request your report. The agency will send your report through the mail in approximately 5 business days.
Submit a Dispute for Factual Errors
As with other reporting agencies, ChexSystems sometimes makes mistakes on consumers’ banking activity. They often mix up social security numbers, names, outdated information, misreport from outside banks and many other errors that can result in false account flagging. If you find inaccurate information when reviewing your ChexSystems report, be sure to submit a dispute using the ChexSystem website.
A good rule of thumb, nonetheless, is to give factual documentation against the error. This may include bank statements or previous payment records. Once you have done that, the law requires ChexSystems to research and either correct or dispute the errors within 30 days.
However, if the report contains valid information, following one or more of these basic steps can help to clear your name:
- Paying off outstanding debts
- Asking creditors to update report entries
- Waiting for your ChexSystems record to clear
Banks That Don’t Use Chexsystems
Just because about 80% of banks use the ChexSystems report does not mean it is futile opening a business checking account with a flagged ChexSystem report. You need to consider with the remaining 20% of banks that don t use ChexSystems. These financial institutions might still use the three main credit bureaus to run you’re a credit check on you. However, they will not run a ChexSystems check. Moreover, some banks will check your ChexSystems report, but won’t depend on it for their final decision.
Here is a list of financial institutions that do not use ChexSystems:
| Account Name / Type | Bank |
| Basic Checking Account | FSNB |
| Chase Total Checking | Chase Bank |
| Checking & Debit | Navy Federal Credit Union |
| Checking Account | Empower Finance |
| Chime Account | Chime Bank |
| Classic Checking | USAA |
| ClearConnect Checking | BBVA Compass |
| Easy Checking | U.S. Bank |
| Express Banking | Fifth Third Bank |
| Free Checking | TCF Bank |
| GoBank Account | Green Dot Bank |
| LifeGreen Checking Account | Regions Bank |
| Personal Checking Account | SunTrust Bank |
| Power Checking | First National Bank Texas |
| Renasant Checking | Renasant Bank |
| TD Convenience Checking | TD Bank |
| United Free Checking | United Bankshares |
Second Chance Business Checking
In the case of the non-ChexSystems banks above not giving you a green light for a business checking account, second chance business checking accounts are the best backup plan. These checking accounts are specifically, designed for consumers with difficulties getting approvals for regular accounts because of issues with ChexSystem report or bad credit.
However, second chance bank accounts usually come at a price. The biggest drawback is higher monthly charges because the institutions think you are a riskier account owner to keep. Therefore, you should be surprised to get no debit card or overdraft protection from these banks. Reading the fine print before signing up is a wise decision. The cons notwithstanding, second chance bank accounts could be your best option for getting a checking account while on Chexsystems.
Here is a list of the banks offering second chance business checking accounts:
| Account Name / Type | Bank |
| Bounce Back Checking | City National Bank |
| Checking Builder | Republic Bank |
| ClearChoice Free Checking | BBVA Compass |
| Community Checking | East-West Bank |
| Essential Checking | Radius Bank |
| Foundation Checking | PNC Bank |
| Memory Builder Checking | MemoryBank |
| Opportunity 100 Checking | Centennial Bank |
| Opportunity Account | Axiom Bank |
| Opportunity Checking | Wells Fargo |
| Pathway Checking | Bank OZK |
| Rebound Checking | Landmark Bank |
| Second Chance Checking | Woodforest National Bank |
| Second Chance Checking | Peoples Cash Solutions |
FAQ – Frequently Asked Questions
How do I get a checking account without ChexSystems?
You can get a checking account without ChexSystems in two ways. The first one is to apply for the account through banks that don’t use ChexSystems to approve your application. The other option, which comes with higher fees and some limitations, is to apply via second chance banks.
Can I open a business account if I am on ChexSystems?
While most banks will decline your business account application, some institutions like the Bank of America allow customers with flagged ChexSystems report. To be safe, however, consider opening your account with a bank that doesn’t rely on the ChexSystems report.
What banks don’t use ChexSystems or TeleCheck?
Many of the financial institutions will check your records with the three major credit bureaus in the US. However, banks such as Chase, Green Dot, and BBVA Compass do not use the ChexSystem or TeleCheck report.
How do I know if I’m in ChexSystems?
Most consumers get to know about their ChexSystems report when their business account application is denied. However, you can request your ChexSystems score or report.
Conclusion
When open a business checking account online, most banks will use the ChexSystems report including running credit checks with the three major credit bureaus. This makes it is easy for your application to be rejected if your report has multiple issues. However, this does not mean you can’t open the account because your ChexSystems report is flagged. Only about 80% of banks use the consumer-reporting agency to determine the validity of your application. You can still open business checking account online no chexsystems using the remaining 20% of the banks. Even if you qualify for an online business checking account with banks that don’t use ChexSystem, a good rule of thumb is to clear your name and have your accounts in good standing.