Opening a bank account is a basic financial need. But for many people, past mistakes can make this difficult. Banks often use a system called ChexSystems to check if someone has a history of problems like unpaid fees or closed accounts. If your ChexSystems report shows issues, many banks will deny your application. However, some banks don’t use ChexSystems. These banks offer “second-chance” accounts, giving people a fresh start. This article explains everything you need to know about banks that don’t use ChexSystems.
What Is ChexSystems?
ChexSystems is a consumer reporting agency. It works like a credit bureau but focuses on banking behavior. When you apply for a bank account, the bank may request your ChexSystems report. This report shows your banking history over the last five years. Negative marks include:
- Overdrafts you didn’t repay.
- Accounts closed due to unpaid fees.
- Suspected fraud or identity theft.
- Too many bounced checks.
If your report has these issues, traditional banks may reject your application. This can make everyday tasks—like depositing checks or paying bills—harder. But not all banks use ChexSystems. Let’s explore your options.
Why Do Banks Use ChexSystems?
Banks want to avoid risky customers. If someone has a history of overdrafts or unpaid fees, the bank could lose money. ChexSystems helps banks screen applicants quickly. However, this system can punish people who made one-time mistakes or faced emergencies. For example, losing a job might lead to overdrafts. ChexSystems doesn’t consider why the problem happened—only that it did.
Types of Banks That Don’t Use ChexSystems
Banks that don’t rely on ChexSystems fall into a few categories:
- Online Banks: Many online banks skip ChexSystems checks. They focus on your current financial situation, not past mistakes.
- Credit Unions: Some credit unions use alternative reporting systems or offer “second-chance” accounts.
- Prepaid Debit Card Providers: Prepaid cards aren’t traditional bank accounts but work similarly. Most don’t check ChexSystems.
- Neobanks (Digital-Only Banks): These tech-focused banks often have simpler approval processes.
Let’s break down each option.
1. Online Banks Without ChexSystems
Online banks operate entirely over the internet. They have lower costs than traditional banks, so they may take more risks. Here are popular options:
1. Chime®
Chime is a popular online bank offering checking and savings accounts.
ChexSystems Check?: No. Chime uses other methods to verify your identity.
Features:
- Early direct deposit (up to two days early).
- No monthly fees or overdraft fees (if you qualify for SpotMe®).
- Automatic savings tools.
Drawbacks: No physical branches.
2. Varo Bank
Varo offers checking and savings accounts with no monthly fees.
ChexSystems Check?: No. Varo uses third-party services for verification.
Features:
- High-yield savings account (up to 5.00% APY).
- Cash advances up to $250 with no interest.
Drawbacks: Limited customer support hours.
3. Current
Current is a fintech company offering spending and savings accounts.
ChexSystems Check?: No.
Features:
- Early direct deposit.
- Fee-free overdrafts up to $200.
- Teen accounts for parents.
Drawbacks: No joint accounts.
4. Ally Bank
Ally is a full-service online bank.
ChexSystems Check?: Sometimes. Ally may check ChexSystems for certain accounts but is more lenient.
Features:
- Interest-bearing checking accounts.
- 24/7 customer support.
- No monthly fees.
Drawbacks: Savings accounts have transaction limits.
2. Credit Unions With Second-Chance Accounts
Credit unions are member-owned nonprofits. They often focus on community support, making them more flexible. Many offer “second-chance checking accounts” with fewer restrictions.
1. Navy Federal Credit Union (NFCU)
NFCU serves military members and their families.
ChexSystems Check?: No. They use their own criteria.
Features:
- Second-chance checking (Active Duty Checking®).
- Low fees and free ATMs worldwide.
Drawbacks: Membership is limited to eligible groups.
2. Alliant Credit Union
Alliant offers high-yield accounts and low fees.
ChexSystems Check?: No. They use alternative reports.
Features:
- Free checking with interest.
- Up to $20/month in ATM fee reimbursements.
Drawbacks: Requires a $5 donation to join.
3. United Consumers Credit Union
UCCU offers a “Fresh Start Checking” account.
ChexSystems Check?: No.
Features:
- No overdraft fees.
- Low monthly fee ($6, waivable).
Drawbacks: Limited branches outside the Midwest.
3. Prepaid Debit Cards as Alternatives
Prepaid cards let you load money onto the card for spending. They don’t require ChexSystems checks.
1. Bluebird by American Express
Bluebird offers fee-free spending and direct deposit.
Features:
- No credit check or ChexSystems.
- Mobile check deposit.
Drawbacks: No interest on balances.
b. Netspend®
Netspend offers customizable prepaid cards.
Features:
- Direct deposit up to two days early.
- Cashback rewards.
Drawbacks: Monthly fees up to $9.95.
3. Walmart MoneyCard®
Powered by Green Dot, this card offers cashback at Walmart.
Features:
- Early direct deposit.
- Savings account with 2.00% APY.
Drawbacks: $5.94 monthly fee.
4. Neobanks and Digital-Only Options
Neobanks are app-based financial services without physical branches. Many don’t use ChexSystems.
1. Cash App Banking (Cash Card)
Cash App offers a Visa debit card linked to your Cash App balance.
Features:
- No credit checks.
- Instant discounts at select retailers.
Drawbacks: No FDIC insurance on balances.
2. Revolut
Revolut offers multi-currency accounts and budgeting tools.
Features:
- No ChexSystems check.
- Free international transfers.
Drawbacks: Fees for premium plans.
3. Oxygen
Oxygen targets freelancers and small businesses.
Features:
- No hidden fees.
- Cashback rewards.
Drawbacks: Limited ATM access.
How to Apply for a Second-Chance Account
- Check Your ChexSystems Report: Visit ChexSystems.com to request a free report. Fix errors before applying.
- Compare Options: Look for low fees, mobile banking, and FDIC/NCUA insurance.
- Gather Documents: You’ll need a government-issued ID, Social Security number, and proof of address.
- Apply Online or In-Person: Many second-chance accounts allow online applications.
Tips for Managing Your Second-Chance Account
- Avoid Overdrafts: Set up balance alerts.
- Pay Fees on Time: Some accounts convert to regular accounts after 12 months of good use.
- Rebuild Your History: Use the account responsibly to improve your ChexSystems report.
Frequently Asked Questions
Q: Can I get a savings account without ChexSystems?
A: Yes. Many banks listed here offer savings accounts.
Q: How long do ChexSystems records last?
A: Five years. After that, negative marks are removed.
Q: Are second-chance accounts safe?
A: Yes, if the bank is FDIC-insured or the credit union is NCUA-insured.
Conclusion
Banks that don’t use ChexSystems give people a chance to rebuild their financial lives. Options range from online banks to prepaid cards. By choosing the right account and managing it well, you can avoid past mistakes and regain banking access. Always research fees, features, and customer reviews before applying. Your financial future is still in your hands—even if ChexSystems says otherwise.