A bank denied my checking account

This notice

The letter or email says the bank cannot open your checking or savings account. It may say the decision used a consumer report.

That paper is an adverse action notice for a deposit account. The CFPB page Why was I denied a checking account? says the bank must name the checking-account reporting company it used.

The two largest companies are ChexSystems and Early Warning Services. They are not Equifax, Experian, or TransUnion. A strong credit score does not fix a bad checking-account file.

The CFPB guide Helping consumers who have been denied checking accounts names two common reason groups. Those groups are account abuse and suspected fraud. Account abuse can mean unpaid overdrafts or unpaid fees. Fraud is the bank’s claim of intentional misuse.

Recent CFPB complaints describe the same denial at Chase, SoFi, Ally, BMO, Citizens, Truist, and CIT Bank. Some people only learned the reason after they ordered the specialty report. Some files showed an “Account Abuse” line. That line used a wrong address, a paid-in-full record, or an account a thief opened.

This is not a credit-bureau letter that says a dispute was verified and the file is still wrong. That other paper is about a credit tradeline.

It is also not a notice that an existing bank closed your account and is holding leftover funds. That is a different letter.

Official path

1. Request a free copy of the checking-account report from the company named on the notice. The CFPB guide says you can request that copy within 60 days of the adverse action notice. The CFPB page How do I get a copy of my checking account consumer report? also covers yearly copies. You can request one free report every 12 months from each nationwide checking-account reporting company, even without a denial. Early Warning says a file disclosure is sent within 15 calendar days after it verifies your identity. Some states have shorter times.

2. Compare every account, address, balance, and reason code with your own records. Circle lines you do not recognize and amounts you already paid. Do the same for any “Account Abuse” or fraud label that does not match the facts. The CFPB denial page says most negative information cannot stay more than seven years. Some companies disregard information after five years.

3. Dispute errors with the reporting company that holds the file. The CFPB page How do I dispute an error on my checking account consumer report? says to use the contact information on the notice or the report. Submit a dispute at ChexSystems says reinvestigations are usually finished within 30 days. Maine residents get 21 days. Extra documents sent during the review can add up to 15 days. Dispute a file disclosure at Early Warning says a written dispute can take up to 30 calendar days. The 2016 CFPB sample letter lists older street addresses for both companies. Use the address on your notice or the current company page. ChexSystems now lists Attn: Consumer Relations, P.O. Box 583399, Minneapolis, MN 55458. Early Warning now lists Attn: Consumer Services, 5801 N. Pima Road, Scottsdale, AZ 85250.

4. Write the bank or credit union that furnished the line. The CFPB dispute page says that company must investigate too. Use the sample letter. Send copies, not originals. Keep a dated copy.

5. Check your Equifax, Experian, and TransUnion reports as well. The CFPB denial page says some banks use a regular credit report instead of, or in addition to, a checking-account report. The CFPB page How do I get a free copy of my credit reports? explains that path. If a line is identity theft, file at IdentityTheft.gov and enclose that report.

6. Add a short statement to the checking-account file if the investigation does not fix the record. The CFPB dispute page gives you that right. Early Warning limits the rebuttal to 100 words or less.

7. Submit a complaint at Submit a complaint if the file stays wrong or the bank will not name the reporting company. Attach the denial notice, the specialty report, and your dispute letters. The complaint page says most companies respond within 15 days. The CFPB denial page also says you can ask another institution about a lower-risk account. Those products rely less on these reports.

Forum stories sometimes say a phone call to the denying bank is enough. The official pages win that conflict. Get the report, then dispute the reporting company and the furnisher in writing.

What people reported

Often helps

• Ordering the ChexSystems or Early Warning file right after the denial, then disputing an “Account Abuse” line that was paid, not theirs, or tied to a wrong address.
• Sending an IdentityTheft.gov report when the specialty file showed an account the person never opened.

Often fails

• Only arguing with the bank that said no, without a written dispute to ChexSystems or Early Warning and to the bank that furnished the line. Repeat applications can add more inquiries while the old record stays.

Template

[DATE]

[CHEXSYSTEMS OR EARLY WARNING NAME]
[ADDRESS ON YOUR NOTICE, REPORT, OR THE COMPANY DISPUTE PAGE]

Re: Dispute of checking-account consumer report, Consumer ID [NUMBER]

I am writing to dispute inaccurate information on my [CHEXSYSTEMS / EARLY WARNING] consumer report dated [DATE]. I learned of this file after [BANK NAME] denied my deposit-account application on [DATE]. The adverse action notice named your company.

I dispute the following item(s):
- Furnisher: [BANK THAT REPORTED THE LINE]
- Account ending: [LAST FOUR]
- Reported as: [ACCOUNT ABUSE / UNPAID / FRAUD / OTHER]
- Why it is wrong: [NOT MY ACCOUNT / WRONG ADDRESS / PAID IN FULL ON DATE / NEVER OPENED]

Please investigate and correct or delete any inaccurate or incomplete information. Please send written results and an updated report.

I am sending a copy of this letter to [FURNISHING BANK]. Enclosed are copies of [DENIAL NOTICE / REPORT PAGE / PAYMENT PROOF / IDENTITY THEFT REPORT], not originals.

[FULL NAME]
[ADDRESS]
[PHONE]
[EMAIL]

Enclosures: [LIST]

Stop here if…

• You were served a lawsuit, summons, or collection complaint about a bank balance. Court dates are not the same as a deposit-account denial.
• An existing bank closed an account you already had and is holding leftover funds. That is a different notice.
• The paper denies a credit card, auto loan, or mortgage you applied for. That is a credit adverse-action notice, not a checking-account report.

FAQ

Is this the same as a credit-report denial?

No. The CFPB checking-account pages say ChexSystems and Early Warning compile a specialty report about deposit accounts. That file is not your Equifax, Experian, or TransUnion credit report. A bank may still pull a credit report too. Check both kinds of report.

How long does a dispute take?

ChexSystems says reinvestigations are usually finished within 30 days, or 21 days if you live in Maine. Extra documents sent during the review can add up to 15 days. Early Warning says it has up to 30 calendar days and then notifies you within five business days.

Do I have to pay an old unpaid balance before I can bank again?

The CFPB denial page says some banks require you to pay old unpaid charges before they will open a new account. That is a bank policy, not a step the reporting company can skip for you. If the unpaid amount is wrong, dispute that fact first.

The bank never sent an adverse action notice. What now?

The CFPB pages say a bank that turns you down based on a checking-account report must give you a notice that names the reporting company. Ask the bank in writing for that notice. You can still request your free annual ChexSystems and Early Warning reports while you wait.

The ChexSystems or Early Warning line is not my account.

Treat that as identity theft. The CFPB dispute page says to tell the reporting company and the furnishing bank, and to use IdentityTheft.gov. ChexSystems may ask for an Identity Theft Affidavit and copies of your identification.