ChexSystems is a database that 80 percent of banking institutions review before letting you open a checking account. This database is very similar to the three major credit bureaus  Experian, Equifax and Trans Union  except it lists account mishandlings such as overdrafts. If your name somehow ends up in this database, you may find it very difficult to open up a checking account at a credible financial institution for five years.

Banks use ChexSystems because of the billions of dollars they lose annually to check fraud and account abuse. This database assists banking institutions determine if an applicant is a risk to them. Usually, if you have written one or two bad checks or have overdrawn your account with your debit card a couple of times you would not end up in the ChexSystems database. However, if you owe money to a financial institution on a closed checking account or you have outstanding bad checks, there is a very good chance you are listed.

Tips to avoid being listed on ChexSystems:

- Make sure you have the funds available in your account before writing a check or using a check/debit card.

- Ask a representative at your bank how long it takes for checks and/or deposits to clear.

- Balance your checkbook regularly or keep track of your account via online banking daily.

- If you decide to close a checking account, make sure all transactions have cleared and are posted to the account.

If you are not on the ChexSystems database but still feel you need help or want to learn more about handling a checking account, you can check out Debt, Money & Credit Concepts, DMCCs free financial literacy program. Our program is available online at http://www.dmcccorp.org/FinancialLiteracy/Introduction.asp or by the United States Postal Service.

Source: http://www.bankrate.com/brm/green/chk/basics1-6a.asp

DMCC is a 501 (c)3 is a charitable organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with their debt.  Education is provided free of charge to consumers as well as personal counseling to identify the best options for the repayment of any unsecured debt. To speak to a certified credit counselor, call 1-954-418-1466, email contact@dmcconline.org.

DMCC is located at 700 West Hillsboro Blvd., Building 1, Suite 105, Deerfield Beach, FL 33441.