Chexsystems

[Anonymous]

Can you be denied for opening a bank account if you have too many bank account closures? How do you determine the limit for this?

[Anonymous]

I have the same question as the OP, but mine is about opening bank accounts.  I have opened several new bank accounts in the last 8 months, most of them purely to get the associated sign up bonus.  I'm glad I have done it, since I have made a lot of money doing it.  But of course each new account has probably involved a Chexsystems inquiry. 

I am not opening up a huge number in a short time (6 accounts in a month, say) -- like an idenity thief or someone doing check kiting (etc.) would do. 

I have heard that banks begin to consider X number of inquiries to be a problem, even with a clean report with nothing negative on it.  Like Monoglot, I am curious how to go about quantifying what X might be.

[Anonymous]

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@Anonymous wrote:
Can you be denied for opening a bank account if you have too many bank account closures? How do you determine the limit for this?

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You can't determine this.  Only the new bank that you're applying for can determine how many is too many.  It's like asking how many inquiries is too many.  Impossible to know.

[UncleB]

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@Anonymous wrote:
Can you be denied for opening a bank account if you have too many bank account closures? How do you determine the limit for this?

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I've not opened a checking account in a while, but the last time I did the only thing they were concerned with specific to Chexsystems was if you owed another bank money for NSFs, overdrafts, etc. and that you didn't have any old accounts closed due to fraudulent activity.  If you did, they would deny your application for a new account until you cleared up the problem with the other bank, or if fraud was involved you might not get a new account at all.

When I opened my account with Wachovia (now Wells Fargo) they did check my credit as well, but they were just looking for current negative info.  I had a four year old bankruptcy showing back then, but they didn't even mention it (actually, I believe all the lady at the desk saw was a score, not account-level info).  I was even given a higher ATM daily withdrawal limit right away due to my score, so it definitely didn't hurt me.

I know from reading threads on here some CUs are getting finicky about Chexsystem inquiries, which surprised me a bit at first.  I guess it does make sense, though, since most people don't need a half-dozen checking accounts, and banks/CUs (especially the smaller ones) only want to pay a new account bonus to somebody who will be actively using the account, not just admiring it.  Years ago this wasn't an issue, since accounts were generally opened in person, but now that folks can easily open a dozen accounts from their own armchair in a single sitting it's more of a concern.

TL;DR version... as long as you keep your numbers reasonable, you're not likely to have a problem opening a bank account, at least due to inquiries.  Even the case I mentioned above with a smaller CU (I don't recall which one) their limit was five inquiries on Chexsystems, which is still quite a few.  I also recall the branch manager was able to override this if the applicant could provide a good explanation.

[Anonymous]

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@Anonymous wrote:

I have the same question as the OP, but mine is about opening bank accounts.  I have opened several new bank accounts in the last 8 months, most of them purely to get the associated sign up bonus.  I'm glad I have done it, since I have made a lot of money doing it.  But of course each new account has probably involved a Chexsystems inquiry. 

I am not opening up a huge number in a short time (6 accounts in a month, say) -- like an idenity thief or someone doing check kiting (etc.) would do. 

I have heard that banks begin to consider X number of inquiries to be a problem, even with a clean report with nothing negative on it.  Like Monoglot, I am curious how to go about quantifying what X might be.

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Same answer I gave to Mongolot.  Impossible to tell and only the banks you deal with can determine the number and I am sure that their are many variables involved.  Not every new new bank account goes thru ChexSystems so it might be good for you to check that report.  Overall, based on what you said you only opened 'several', I don't think you have anything to worry about.

[gibeon]

Some banks are still nsitive to Inquiries on Chex systems and will deny you an account if you have "too many."

I know of several Credit Unions that will deny an account if you already have 5 or more Chexsystems Inquiries in the last 2 years.

A lot of banks don't seem to care though.

[core]

By "closed" I'm assuming you mean closed by the bank, not by you.

It depends what reason is logged on your Chex report.  I was in Chex hell for 5+ years, and spent nearly that entire time researching banks' requirements just trying to get an account.  If your previous closure shows the reason as "Abuse", you can pretty much count on being denied by anyone who checks Chex.  It doesn't matter how many.  One is enough if it's abuse.  Having an account or two closed for too many NSFs would be considerably easier to deal with.

For what it's worth, Wells Fargo considers overdrawing an account by a lousy $1-2k "abuse", and they reported it as such on my file.  Of course I also refused to pay their manufactured overdraft fees and skipped town instead, but that's beside the point.

[Anonymous]

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@gibeon wrote:
Some banks are still nsitive to Inquiries on Chex systems and will deny you an account if you have "too many."

I know of several Credit Unions that will deny an account if you already have 5 or more Chexsystems Inquiries in the last 2 years.

A lot of banks don't seem to care though.

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Any way you could list those CUs? I want to keep them in my mental record in case I app for them. 

[UncleB]

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@Anonymous wrote:

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@gibeon wrote:
Some banks are still nsitive to Inquiries on Chex systems and will deny you an account if you have "too many."

I know of several Credit Unions that will deny an account if you already have 5 or more Chexsystems Inquiries in the last 2 years.

A lot of banks don't seem to care though.

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Any way you could list those CUs? I want to keep them in my mental record in case I app for them. 

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How many checking accounts are you looking to get? 

Joking aside, if you have a true need for more than five checking accounts in a two year period, most likely you'll be able to get a branch manager to override the rule (if you ever run into it at all - it's not extremely common). 

It's not quite like a credit card approval... the local folks tend to have much more control over deposit accounts, especially with credit unions.  In the past threads where someone did run into the Chexsystems inquiries threshold - and you have to make an effort to even find them - the poster was able to still get an account by providing a good explanation.  If I recall correctly, the reason the person gave was opening new accounts with a parent and/or child (i.e. joint accounts), which was considered an acceptable reason.  They just want to make sure you're not just signing up for multiple accounts for the bonuses.

If you're applying online there's generally automation to get past, but if applying in person I can't imagine the branch folks having too much of an issue with inquiries, especially if there's nothing negative on your report.  If they did have an issue and didn't like your explanation, most likely that's a bank you're better off without, anyway - imagine how they would be if a true problem were to come up?

[DaveInAZ]

One thing to keep in mind is that Chexsystems has competition - EWS, Early Warning System. EWS is owned by Bank of America, BB&T Corporation, JPMorgan Chase, Wachovia, and Wells Fargo, so those banks definitely use EWS as well as others, and EWS/Chex don't share info..

I've been concerned as I've opened 5 new accounts in the past year or so, chasing new account bonuses and great rates for a car loan and Visa CC. Opened an account with a small CU Dec 2014 in anticipation of app'ing for a car loan (got it in Jan 2015, 60 mo. 1.99% APR for a 2013 model from Hertz). Then opened Chase March 2015, just chasing $300 new account bonus. Opened Discover savings in Aug, $50 bonus & to strengthen my relationship after Discover IT CC approval in July. New CU checking & savings in Sept, $200 new account bonus (had closed Chase), but it's a keeper - and I opened it in person, rep said only Disco showed up on Chex (car loan CU was almost a year old by then, so maybe she didn't notice it). Then in Dec another CU mailed a Visa CC pre-approval, approved w/$4k SL, 6 mo 4.99% APR, then 10.9% - I had to open a savings account for membership, breezed through the obvious Chex ID screener opening the account online. Finally, opened BoA checking in Dec, $250 new account bonus - but the only bank in my rural small town is closing 1/31/16, so I moved my Soc.Security payments to BoA, so it's a keeper (it's a minimum of 2 monthly payment cycles to change SocSec direct deposit).

And I think I'm done with new accounts - previous to this spree I hadn't opened a new bank account in almost 10 years. But after that spree I should have only 3 new accounts on Chex & 2 with EWS.