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Posted: 2006-01-25 / Author: Kevin Erickson
Debit Report - What Is It And How Does It EffectFew consumers are aware that there are companies tracking all
of their personal financial transactions - bankruptcies, credit
cards, installment loans, mortgages and judgments. On the other
hand, unless you were raised in a cave you've heard of a credit
report and most likely understand that it's a record of all of
your purchases. Credit reports are primarily assembled by three
credit bureaus (Equifax, TransUnion and Experian) which is then
available upon request from most lenders, mortgage brokers or
credit bureaus.
Credit reports tell these businesses, in summarized form, how
an individual has handled credit in the past and is the primary
tool being used to decide whether or not they are worthy of
being granted more credit in the form of a loan or additional
credit cards. However, what people don't realize is that there
is a company that keeps track of the banking transactions of
American consumers but unlike credit reports, that information
is available only to banks in the form of a debit report. You
may not have heard of a debit report, but it can affect you in
ways you may not even realize and it can prevent you from
opening a bank account.
Debit reports are compiled and maintained by a company called
ChexSystems, which also maintains a database of banking
transactions by consumers and creates a debit score based on
whether or not an individual has ever had an account forcibly
closed, their history of deposits, withdrawals and overdrafts.
In a nutshell, you probably don't have an entry in the
ChexSystems database unless you have a history of writing bad
checks, consistently overdrawing your account or you've had a
bank account closed. Of course, mistakes are sometimes made
that results in individuals having incorrect entries input into
the database that they have no way of finding out about until
their request to open a checking account is denied by their
bank. Most banks currently use this system and while some
provide a little latitude, most will refuse to do business with
anyone who has a negative entry in the "debit report" database.
The system was originally designed to simply keep track of
people who were writing bad checks, but over the past 30 years
it's evolved into something much more complex. Consumers are
entitled to receive a copy of their report from ChexSystems,
but few people request one; most likely because they have never
heard of the company or the report. Because it's nearly
impossible to operate in today's society without a bank account
it doesn't hurt to at least be aware of this system. The last
time we checked, ChexSystems didn't have a website but they can
be reached by phone at 800-428-9623.
On a positive note, there are numerous third party websites
devoted to helping people who have had problems establishing
bank accounts due to problems with their debit report. Simply
do a search for "ChexSystems" using your favorite search
engine.
About The Author: Kevin Erickson is an entrepreneur and writer.
For other articles he's written visit: Debit Cards -
http://www.eyeondebit.com | Consolidate Debt -
http://www.debtmergeresources.com | Managing Debt -
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