Banking and Credit Checks
How do banks determine your credibility?
Most checking accounts do not require a serious credit check. But banks do verify your identity with a soft credit check. Banks can also access your banking habits through ChexSystems. When a person applies for a regular checking account, the bank will contact ChexSystems Inc. ChexSystems records information about applicants.
The information stored includes: bounced checks, savings account negligence, atm/debit card abuse, overdrawn history, closed accounts, outstanding debts to bank, insufficient funds and more.
ChexSystems is a central database. A person is either on record or not all. Banks report information to ChexSystems so that irresponsible bankers are exposed. Banks also ask ChexSystems if an individual has a record and if they do, it is not good. ChexSystems does not advise banks as to who should or should not be an account holder. It simply stores information so that financial institutions can get to know their applicants.
So what is the role of credit reports in banking?
Banks verify identity by pulling credit reports. This is not considered a hard credit check. However, financial institutions notorious for credit checks are: ING, Bank of America, HSBC Premium, Citibank, Presidential Bank Checking, Scottrade, First Federal Savings Bank, Wells Fargo and more. It is important to understand the difference between a hard and soft credit check. Read about the difference here: http://www.icreditinc.com/knowledge/articles/hard-vs-soft-credit-checks
Most people will not be rejected for a regular checking account but if your goal is to be approved for something more sophisticated, like ING’s checking services, then your credit score and credit history better be good!
If you need help understanding your credit history and your existing score, or would like to boost your score so that you can get approved for valuable checking and savings accounts, contact ICC today!
- Understanding Credit:
