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Checking Account Mistakes That Lead To ChexSystems Problems

Checking account mistakes are generally incurred when the factors that have direct and significant effects to checking account management are sometimes disregarded. Such problems in this type of bank account are reported to ChexSystems.

ChexSystems acts as a network where all the mistakes of checking and savings account holders are relayed to financial institutions. This may cost the holders of banks accounts the chance to be approved for a new checking account when they move to a new bank or credit union. Subsequently, people who are affected end up looking for second chance checking accounts that allow them to start their new bank account with less stringent conditions.

However, they may face greater restrictions and fees when dealing with second chance account. That is why it is wise to pay attention to how you manage your bank account activities, so that you will not be caught in a situation where the only account you can get is a 2nd chance checking account. What are some of these mistakes to avoid? Let's take a look at this list of items that can result in ChexSystems problems.



Writing Bad Or Bounced Checks

One of the most common mistakes is writing a bad check. It is commonly known as a bounced check where a check used for payment is written when in fact, there is not enough money in the account. When this happens, you may be accessed a NSF (not sufficient funds), or an overdraft fee with interest if the bank pays the check anyway by extending you a short term loan.

Usually isolated incidents of these happening are accepted by banks if you pay the bank fees in time. They are not likely result in ChexSystems problems in your report. However, if you end up writing lots of bad checks in a row, you may risk your activities being reported to ChexSystems.

How To Avoid Writing Bad Or Bounced Checks

To avoid this, always make sure that you have a sufficient level in your checking account balance to cover the checks that you write. Perhaps you have deposited another check in the bank, or you expected a direct deposit of your paycheck to clear and the funds but they did not clear in time to become an available balance for your account. Another common reason is that checking account holders spent more on their account than they thought and did not check this before writing new checks.

Make sure to allow for 3 to 5 days for new deposits to clear, and to review the available balance in your checking account before writing out new checks that will be drawn on your account. These measures are sometimes not sufficient, because you may have written out a check from before that has not yet been presented.

Use Online Banking, Email Alerts & Text Messaging To Keep Current

The safest way is to also keep an accurate checking account register that records all the checks that you write, along with subtracting the amounts of all the purchases and transactions you are making. In this day and age where our ATM cards can be used for debit card or Visa/Mastercard Check card transactions, it can sometimes be difficult to be cognizant of how much money we are spending. That is why we need to pay attention to all transactions that could impact our checking account balances.

To make sure that you are up-to-date with your account balance, and notified of all transactions, make sure that the bank or credit union is sending the statements to your correct mailing address. If you can, sign up for online banking and text message updates so you can keep track of your account balance at all times. Many banks also allow you to set up email alerts to let you know if your balance fall below a certain amount. These are features that we can make use of to keep ourselves fully informed.

Try Not To Post-Date Your Checks

Another dangerous tactic is to post-date your checks. Unless you really trust that the party receiving the check will not cash it early, send them a check only when there is available money on your account to be withdrawn. Even if you have warned the other party not to cash a your check too early, they may forget and present it to their bank. This will get put through the system and cause your account to be over-drawn, or the check to be returned unpaid. This would be fees on your end and the other party's end as well. It puts your name in jeopardy of being reported to ChexSystems, resulting in future problems for you.

Errors Can Still Slip Through

It is possible that errors still slip through. However, if you keep a close watch on your checking account balance, you can immediately transfer money into your account once you discover that you do not have enough money in your account balance to cover the ongoing transactions.

Open Up All Letters From Your Banks

Make sure to open up all letters that come from banks in order to act on the information presented. Don't under-estimate the type of banking activities that you may end up being responsible for, for things you have no idea count.

Recently, I received a letter from my bank (call it Bank A) that my checking account has gone into inactive status because of a lack of activity. At around that time, I deposited a check from a second banking institution (Bank B) into the first banking institution. This check was not accepted by the Bank A, causing the folks in Bank B to issue me a warning. As I was abreast of the situation, I explained the situation to them. The representative from Bank B said that similar repeated acts could bring my account to closure, which could mean a negative record on my ChexSystems report.

Paying Bills From The Wrong Checking Account Can Be One Click Away

Sometimes, we may have multiple bank accounts where we pay our bills from. With online payments being just a click away, we may click to pay from the bank account where there is not enough money. Or the could be linked to an automated payment that was set up and then forgot ton. Needless to say, it may end up bringing about NSF not sufficient funds fees or OD overdraft fees on the checking account. Worse, we may think that we have paid all our bills and go about our daily activities, completely unaware. If we do not deposit enough money in the bank in time, they may cause them to eventually close our account with fees owed, and a report included in our ChexSystems record.

Final Advice To Avoid Checking Account Errors

In summary, it is important to be vigilant about our savings and checking account balances. For checking accounts, there should always be sufficient funds to cover the checks that we write. We should also strive to be up-to-date on activities that are related to our accounts, and use of our bank accounts. Sometimes, accounts with insufficient balances become inadvertently used to pay for bills while we are blissfully unaware until the consequences of a bad ChexSystems report hit us.

A Fresh Start With A Second Chance Checking Account

If you find that unfortunate past mistakes have landed you in the ChexSystems report, don't fret. In most cases, you can always start fresh with a second chance checking account. However, make sure that you keep vigilant to avoid landing your account in trouble again. By demonstrating a good track record, you can have your second chance account upgraded to a regular account again in 6 to 12 months. ChexSystems problems, like a lot of problems in life, can be overcome with a systematic and well-planned approach.

As an alternative to a conventional checking account, consider a prepaid Visa card account with no ChexSystems requirements. It works just like a checking account, allowing for direct deposit of paychecks and online billpay (one-time or recurring payments). You can deposit cash into the account from 135,000 retail locations nationwide. In addition, the card can be used anywhere Visa is accepted. Click to learn more: The Perfect Alternative to a Checking Account!


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