ChexSystems Score: What It Is & How To Improve It

ChexSystems Score: What It Is & How To Improve It

Most consumers know they have a credit score and have at least a vague idea of what it’s used for. Few of us, however, are familiar with the credit score’s cousin: the ChexSystems score that documents your banking activity.

ChexSystems is a consumer reporting agency that tracks and reports on individual consumers’ history with deposit accounts. Using the information in this report plus other sources of data, such as your credit report, public records and payday loan history, ChexSystems calculates a numeric score that it calls a QualiFile Score. To keep things simple, we’ll refer to it as a ChexSystems score throughout the rest of this guide.

Your ChexSystems score is primarily used to predict your future banking behavior and the prospect that you will mismanage your account — in other words, how risky it is for a bank to open an account for you. It contrasts with your credit score, which prospective lenders and creditors use for making credit decisions, though your ChexSystems Score may be used for such purposes as well.

Keep in mind, however, that not all banks will use your ChexSystems score to evaluate your application to open a bank account. Some refer only to your detailed ChexSystems report. Others pull your information from similar consumer reporting agencies such as Early Warning Systems or TeleCheck. And a few may not look into your banking history report at all.

Continue reading below to learn how your ChexSystems score is calculated, how to check yours and more.

How To Request Your ChexSystems Score

You can get a copy of your score from ChexSystems, but you must first pay a fee. Unlike with credit scores, there are no third party vendors who will provide your ChexSystems score, and they are not available for free.

Since you need to pay to for a copy, there’s no point in ordering your ChexSystems score if your ChexSystems report is clean, especially because the full report is free. If your report has blemishes, however, then it’s wise to request your score to find out what negative information is hurting it and how to improve it. 

At this time, you can’t order your score online or by phone. To request your ChexSystems score, you’ll need to follow these steps:

At this time, you can’t order your score online or by phone. To request your ChexSystems score, you’ll need to follow these steps:

  • Print and complete the Score Order Form
  • Write a check or money order for $10.50 made payable to Chex Systems, Inc.
  • Mail your completed order form and check to:
  • Chex Systems, Inc.
    Attn: Consumer Relations
    7805 Hudson Rd., Ste. 100
    Woodbury, MN 55125

Within five business days of receiving your request and payment, ChexSystems will mail your score to you.

You must be at least 18 years old to order your ChexSystems score. If you request a score for a minor, you’ll need to furnish additional documentation, a list of which can be found on the agency’s website.

If You Have Been Rejected For An Account

You may also receive your ChexSystems score — for free — either verbally from a bank representative or in a written rejection notice in the event the score was a factor in your application for a new bank account being denied. But that is entirely the bank’s option.

If the bank does decide to disclose your score information to you, the rejection notice must include the following information under the rules of the Fair Credit Reporting Act (FCRA):

  • Your ChexSystems score
  • Other consumer scores used in the bank’s decision
  • Major factors that adversely affected your ChexSystems Score
  • The date your ChexSystems Score was calculated
  • The name and contact information of the consumer reporting agency (ChexSystems, in this case) that supplied your score

What Is A Good ChexSystems Score?

The ChexSystems score ranges from 100 to 899, with a higher score representing lower odds of future default. In general, ChexSystems does not define its scores as either “good” or “bad.” Scores are assigned to consumers based on their estimated likelihood of having their account closed by the bank “for cause” within one year, and how they are evaluated varies by bank.

As illustrated in the table below, ChexSystems provides certain “cutoff” segments from which banks can choose based on the level of risk they’re willing to tolerate. Each bank can decide for itself which specific segments and scores correspond with account approval and rejection. If a bank wants to tolerate a moderate amount of risk, for instance, it will approve applicants with a ChexSystems score of 545 or higher and either reject or at least consider applicants with a lower score

*Cutoff scores are effective as of March 1, 2012.

Your ChexSystems score is based on information from the following sources:

  • ChexSystems consumer report
  • Data from the ChexSystems DebitBureau (a database that includes information gathered from banks and from retailers)
  • Consumer credit report from the major credit bureaus
  • Payday loan history
  • Employment history
  • Public records data from LexisNexis (e.g., residential history, bankruptcy filings and criminal history)

How To Improve Your ChexSystems Score

Improving your ChexSystems score can be a bit more challenging than improving your credit score. As mentioned earlier, your ChexSystems score comprises data from multiple sources and reports to provide a holistic view of your financial history. If you have several problem areas, it may be difficult to focus on all of them at once. That’s not to say it’s impossible to raise your ChexSystems score.

In order to do so, you should first review the factors adversely affecting your score and try to work on them. As long as you demonstrate positive consumer behavior, your ChexSystems score should improve over time. In the meantime, follow these tips:

  • Pay Off Outstanding Debts To Banks: If your ChexSystems report includes legitimate notations for unpaid negative balances on previous accounts, pay these off — or at least make a payment arrangement — and request that your bank update the payment status in ChexSystems when the debt is settled. Although this won’t remove the listing until it expires after five years, satisfying the outstanding debt may raise your ChexSystems score and encourage banks to evaluate you more favorably in the future.
  • Dispute Errors In Your ChexSystems Report:Information in ChexSystems reports isn’t always accurate, and the more black marks in your report, the lower your ChexSystems score will be. If you spot any possible inaccuracies, you should dispute it with ChexSystems and the bank that reported the error as soon as possible. Our ChexSystems Dispute guide can help you navigate the process.
  • Refine Your Account Habits: If you currently have a bank account but are already in the ChexSystem database, take steps to ensure you don’t repeat the same blunders. Our general guide to ChexSystems lists multiple ways to avoid being reported to the agency. Some examples include signing up for overdraft protection, reconciling your check register with your bank statement and making sure you have enough funds to cover checks you issue.
  • Routinely Check Your Consumer Reports: Every year, you are entitled to a free copy of your consumer reports, including your ChexSystems report. You should proactively check these to make sure adverse information has expired and been deleted from your reports, which hopefully will improve your ChexSystems score.
  • Responsibly Manage Credit: Your credit history is a factor in your ChexSystems score. It is in your best interest to ensure that positive information is flowing into your credit reports each month and that these reports, too, are error-free.

Ask The Experts: How To Improve ChexSystems Practices

ChexSystems and other similar consumer reporting agencies have come under regulatory scrutiny for what some critics have described as an excessively punitive system. For additional insight into the current screening policies of financial institutions and ideas on how to improve them, we turned to a panel of leading banking industry experts. Click on the experts’ profiles to read their bios and thoughts on the following key questions: 

  1. Why isn’t a consumer’s positive banking activity reported to ChexSystems? What policy changes do financial industry regulators need to implement in order to reform this system?
  2. According to the Federal Deposit Insurance Corporation (FDIC), 9.6 million U.S. households were unbanked and another 24.8 million were underbanked in 2013, many of whom have low income and a record in ChexSystems. How does ChexSystems affect the economic mobility of unbanked and underbanked Americans, and how can it be improved?
  3. Why are there no standardized guidelines regarding what information financial institutions can report to ChexSystems?