Product of the System

Awhile back, I promised to write some more on how to kick off your credit or give it a little boost. This should be especially valuable to those of you who have ZERO credit history.

Due to time constraints, I’m going to cover point 1 in this post and follow-up later on the remaining points.

Ok, first off, let me just list out a few creative ideas I have used to build my own credit:

1. Open at least one savings account and one checking account
2. Get a secured credit card (or two)
3. Get a secured loan at your local bank secured by a government savings bond
4. Get a loan for your next vehicle purchase (even if you can pay cash) for at least 12 months term. Be sure you NEVER make a late payment!

If you have bad credit or if you are listed on ChexSystems, then you’ve probably had a tough time opening a bank account or even getting a secured card. Yes, there are actually banks who will NOT give you a secured credit card -even if you pay them up-front! In fact, if you are on ChexSystems, most national banks won’t even do business with you, period.

There are several services out there that will “help you open a bank account even if you’re on ChexSystems”, but I’m going to tell you how to do it for free. Basically, you cannot open an account with a bank if they use ChexSystems and are told you are on the list when they call. So, the solution? Don’t be on their list when they call!

All you have to do is file a dispute against whatever caused you to be listed with ChexSystems in the first place –i.e. a bounced check, a non-repaid overdraft, et cetera. Once you file the dispute, ChexSystems will temporarily remove you from their system while they investigate your claim. So, you will then have approximately 30 days to open a bank account. When they call, your file will be clean. If you wrote enough of an argument (with supporting proof) of why you should not be on ChexSystems, then you might actually get taken off the list permanently. But, it’s not really a big deal, because -as of the time of this writing- you can dispute as many times as you like and each time, you’ll get another 30 day window. I wouldn’t abuse that, though. They aren’t stupid!

Here’s the contact information for ChexSystems:

CALL
ChexSystems
Consumer Relations
1-800-428-9623
(Recording only-Instructions)

WRITE
ChexSystems
Attn: Consumer Relations
7805 Hudson Road, Suite 100.
Woodbury, MN 55125

Ok! So now that we’ve covered that, let’s get back to the meat of things…

You will want to open a savings and checking account, because creditors like to see that you are “saving” your money. And, even though you may only have $20 in your savings account, it’s a start. The longer your account is open; the better. Some places can also ask for your average balance and they consider that in their decision, but it is not as crucial.

So, that’s a good start. In the next installment of this series, I will cover point 2: “Obtaining A Secured Credit Card“

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