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If your friend was turned down from opening a bank
account, it's most likely because of their past mistakes with
previous accounts in their name.
The past mistakes could be bounced checks,
non-sufficient fund fees or overdraft balances. Furthermore, if the
friend closed an account without paying the final balance, this will
affect your friend negatively when trying to open a new account in
the future.
Banks know
about the past accounts?
When anyone tries to open a new account, banks and credit unions
perform a search of the persons banking history. Similar to a credit
check, many banks use a company called Chex Systems Inc. to keep
track of a person's banking history, and the bank will access it
when needed.
Each report submitted to ChexSystems remains in their files for five
years unless the bank or credit union that filed the report requests
its removal, which is usually only done if the report was made
because of bank error.
How can your friend dispute the report?
If your friend's ChexSystems report is incorrect, they can dispute
it. But, be aware, that if your friend paid the outstanding balance
to his previous bank, the debt will still remain on their report. It
will just be marked as paid, but will not be removed even after a
dispute. The dispute is only taken seriously when there is a true
error, for example; the amount is incorrect, or the negative item
does not belong to your friend in the first place.
To dispute a ChexSystems report, contact Chexsystems directly and
submit the dispute to:
Chex Systems, Inc.
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Or by phone at 800-428-9623
What next?
Now that you know why your friend can't
open a bank account, here's
a few helpful tips you can pass on to them;
A: They can try to work out a payment plan with the bank (s) they
owe.
B: Tell your friend to consider cashing their paychecks at a check
cashing service. Then, they can have the service write money orders
for their bills and expenses. This is costly, because money orders
could be delayed and cause expensive late fees (they wouldn't even k
now about) and the check cashing fees are expensive.
C: The best option is to tell your friend to get a prepaid debit
card to use in place of a checking account. Prepaid debit cards are
a paperless checking accounts. The right prepaid card can receive
direct deposits from anyone including payroll checks and Social
Security.
The cards works like bank debit cards with the ability to get cash
at ATMs and to make purchases in person, online or by phone anywhere
Visa or MasterCard are accepted.
There are many places to get a pre-paid debit card but, it's
important to do your homework before you open the account. Some
things to look for are;
A: Will the card accept direct deposits from anyone?
B: Does it come with an online website to access balance
information?
C: Can they transfer money from the card, can they do it online?
D: Are the fees reasonable or are they unreasonably high?
E: Can you get cash at ATMs?
F: Are there any ATMs you can get cash without penalties or fees?
G: Can you use the card worldwide?
H: Is it possible to get a card for your college kid and load it
from your web interface?
I: Is the money instantly available or is there a wait?
J: Are there a charges for overdrawing the available balance?
Having a negative chexsystems report on your record can be a real
nightmare. Until the matter is cleaned-up, which can be five-years
the pre paid debit card issued from a non chexsystems bank can be a
real problem solver, not to mention a big money saver!
Perry
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