Can ChexSystems Inquiries be Disputed if made Fraudulently

QUESTION: What if the inquiries are from banks I’ve never had a bank account at and I don’t remember applying for these banks, is it wise to dispute these as fraud or leave alone? I recently just had a business account closed at my local Credit Union because they pulled my ChexSystems and seen I had a charge off account on there I haven’t paid back and they said I have more than 5 inquires and its “suspicious” so they can’t do business with me anymore.

A lot of the inquiries are on there from over two years ago. The ChexSystems website says they can be removed anywhere from 90 days up to 3 years from your report. Do they automatically fall off or do you have to fight to remove them?

ANSWER: ChexSystems inquiries initiated by the consumer can remain up to 3 years. If you did not initiate an inquiry, then you have the right to dispute that error. You can dispute directly with ChexSystems or directly with the bank that initiated the inquiry. Just don’t do both at the same time.

I would start with ChexSystems by simply disputing the inquiries as “No Permissible Purpose” if you did not authorize the banks to run your ChexSystems report. Even if some of the inquiries are from banks where you had accounts. It may be implied that a bank can run a ChexSystems report at any time, but you still DID NOT give your permission for them to do so. Also dispute any duplicate inquiries and request they be deleted too.

Dispute with ChexSystems first, if you get the desired result, you’re done.

Some banks and credit unions have a policy of denying customers who have 5 or more ChexSystems inquiries on their report within a two-year period. Either opening or attempting to open multiple bank account sends up a red flag that something problematic may be occurring. Even though it could be something simple like pursuing bank bonus sign-ups.

It just really depends on the bank’s internal policy – banks view inquiries differently. There is no one set standard.

I would be careful opening new accounts soon after opening others. Some banks may close your new accounts for doing that.

The only way I see getting around that is to find a bank that does not use ChexSystems. Or, you may want to consider incorporating your business, that way you may be able to do business with a bank that only uses the corporation’s EIN (Employer Identification No.) to screen new accounts. The best of luck to you!


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