How To Fix Your Banking Score To Open A Checking Account

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How To Fix Your Banking Score

Are you having trouble opening a new checking or savings account? It may be because a little-known financial score called a banking score is hurting your chances of starting an account, which evaluates your banking history and behaviours, such as overdrafts and account closures. How To Fix Your Banking Score

Many of us are familiar with credit scores. And you may even know the steps to take to monitor and improve your credit. But you may be less acquainted with the idea of a banking score, how to find it, or how to fix any errors that could be causing problems.

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In this article, we explain what a banking score is and how you can check your score today. You’ll also learn how to remove any mistakes on your banking score so that you can open a checking account ASAP. How To Fix Your Banking Score

What Is A Banking Score?

A banking score is a consumer score created by ChexSystems that ranks how well you handle checking accounts. The score ranges from 100 to 899 with a higher score indicating that you are a lower-risk customer. How To Fix Your Banking Score

Your ChexSystems report will include things like:

Banking finance
  • Number of bounced checks
  • Number of account closures
  • Number of inquiries financial institutions have made about you
  • How many check orders you’ve placed
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How To Fix Your Banking Score To Open A Checking Account

 By Robert Farrington | < 1 Min Read Leave a Comment

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Fix your banking score | Source: The College Investor

Are you having trouble opening a new checking or savings account? It may be because a little known financial score called a banking score is hurting your chances of starting an account. How To Fix Your Banking Score

Many of us are familiar with credit scores. And you may even know the steps to take to monitor and improve your credit. But you may be less acquainted with the idea of a banking score, how to find it, or how to fix any errors that could be causing problems.

In this article, we explain what a banking score is and how you can check your score today. You’ll also learn how to remove any mistakes on your banking score so that you can open a checking account ASAP. How To Fix Your Banking Score

What Is A Banking Score?

A banking score is a consumer score created by ChexSystems that ranks how well you handle checking accounts. The score ranges from 100 to 899 with a higher score indicating that you are a lower-risk customer. How To Fix Your Banking Score

Your ChexSystems report will include things like:

  • Number of bounced checks
  • Number of account closures
  • Number of inquiries financial institutions have made about you
  • How many check orders you’ve placed
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If you have a history of bouncing checks or having accounts closed due to unpaid fees, you may have a low banking score. Here are the steps you can take to improve it. How To Fix Your Banking Score

Request A Free ChexSystems Report

As previously mentioned, ChexSystems is the company that records your banking history. Much like Equifax, Experian and TransUnion track your credit history, ChexSystems tracks your history with checking and savings accounts. How To Fix Your Banking Score

You are entitled to one free ChexSystems report every twelve months. You can also request a free ChexSystems Consumer Score.

You can request a free ChexSystems report online. But to get the score, you’ll need to mail the Score Request form to:

Chex Systems, Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125

Ask Your Bank To Waive Overdue Fees

Once you receive your report and your banking score, you’ll be able to see what factors are making it difficult for you to open a bank account. Unpaid bank fees, bounced cheques, payday loans, and any unpaid debts in collections could be dragging down your banking score. How To Fix Your Banking Score

Unfortunately, overdraft fees and bounced checks can leave many people in a vicious cycle. Rather than deal with fee after fee, ask your bank to waive them. Many banks will waive unpaid fees if you specifically ask a customer service representative to forgive the fees.

Getting the fees waived won’t fix your banking score, but it can help you break the overdraft fee cycle. This tactic works best when you have a current banking relationship.  How To Fix Your Banking Score

Ask Financial Institutions To Remove Information From Your ChexSystems Report

If you don’t currently have a checking account, you may want to ask former financial institutions to remove negative information from your ChexSystems report. This may involve a negotiation where you pay old fees in exchange for the bank removing the information from your Chex report. How To Fix Your Banking Score

It’s important to understand that your former bank or credit union is not obligated to remove legitimate negative marks. They may refuse your request, but it can’t hurt to pick up the phone to ask.

Dispute Errors

If you found any errors in your ChexSystems report, you have the right to dispute it. It’s easy to dispute the errors online.

For most people, the easiest method for disputing errors will be to circle or highlight the errors directly on the report that ChexSystems sent to you. You can take a picture of the error, and upload it along with any supporting documentation to the ChexSystems dispute report link. How To Fix Your Banking Score

In addition to uploading the files, provide as much detail as possible when you fill out the online dispute form.

If you’re still confused, call ChexSystems customer service at (800) 513-7125 to get more information.

Refine Your Banking Habits

If you have a checking account, but your bank has threatened closure, you may need to refine your checking habits. Here are a few good banking practices to follow. How To Fix Your Banking Score

  • Don’t float cheques. Always wait to write a cheque until you know you have the money in your bank account.

  • Know your account balance. It is important to regularly check your account balance, and plan for future expenses, so you don’t dip below zero.

  • Build a buffer. Try to build a $1000 buffer in your checking account. Your goal is to think of $1000 as your new zero. This buffer will protect you from all kinds of fees. Plus it gets you on your ways towards building a complete emergency fund.

  • Avoid payday loans. Payday loans can adversely affect your banking score. Try to avoid them whenever possible.

  • Manage credit responsibly. If you use credit cards or other types of debt, pay these debts on time and in full each month. That will help you build a positive credit history which may affect your banking score.

Apply For A Second-Chance Checking Account

Once you’ve worked through old issues and disputed errors, it’s time to work on moving your financial life forward. That means opening up a new checking account. Since a checking account is the centrepiece of your financial life, you want to get the best possible account. Look for accounts with low monthly fees and minimal (or no) overdraft fees. How To Fix Your Banking Score

Local credit unions may offer accounts if you qualify for membership. Ideally, you should be in a place where you can open a second-chance checking account. These accounts are specifically geared towards people who have struggled with account closures in the past. Here are some of the best places to open second-chance checking accounts. How To Fix Your Banking Score

Consider Opening A Prepaid Debit Card

When you can’t open a bank account, opening a prepaid debit card may be one of your next-best options. Many of these cards (such as the Walmart MoneyCard) will allow you to accept direct deposit (from your employer) and even deposit personal checks.

With these types of cards, you’ll almost always pay a reload fee or a deposit fee. But these are lower than the fees you’d typically pay at a cheque-cashing store. Opening a prepaid debit card won’t help you fix your banking score. But it will help ease some of the issues that many underbanked consumers face, such as high fees for cashing checks and limited access to traditional banking services. How To Fix Your Banking Score

Know Your Credit Score

It’s important to note that some banks also rely on your credit score when deciding on whether to let you open an account. So, beyond your banking score, you should also know your credit score and work to improve that as well. For banks that do check your credit score, having a score over 650 is usually required. How To Fix Your Banking Score

Final Thoughts

Over time, the negative impact of bounced cheques and account closures eases, and your consumer banking score should improve. If you don’t qualify for a checking account today, try again in six months or a year. How To Fix Your Banking Score

Soon should you have the opportunity to open a second-chance checking account. And if you continue to follow positive banking habits, you’ll eventually be able to open an account with one of the banks from our list of the best free checking accounts right now. How To Fix Your Banking Score

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