Banks Do Hard Credit Inquiries On Checking Accounts

Did you know that some banks pull your credit score when you apply for a checking account? And did you know that some banks require a minimum credit score in order to accept you?

Many banks simply use ChexSystems, which is a network comprised of financial institutions that regularly contribute information on mishandled checking and savings accounts to a central location. ChexSystems shares this information among the member institutions to help them asses the risk of opening new accounts.

Many of the nation’s most popular banks use ChexSystems to determine whether or not to accept an application. I contacted many of the largest and most popular banks and asked about their policies. The responses I got were quite interesting

For example, Bank of America, Chase Bank, Citi Bank, and TD Bank all use ChexSystems as their only check before issuing a checking account.

Wells Fargo goes half a step further by using ChexSystems first, and if anything looks suspicious, they do a soft pull.

Everbank does soft credit inquiries and does not use ChexSystems.

Want to know which ones do hard credit inquiries on checking accounts?

ING does a hard credit inquiry on new checking accounts, although long-time customers with a different type of account are likely eligible without an inquiry.

Ally Bank also does a hard credit inquiry on new checking accounts, and went even further to tell me that in order to qualify, a credit score of 600 or better is needed.

Want to know if what your ChexSystems report looks like? Tomorrow I’ll detail what it takes to get a free report and what is included.

Readers, does knowing this make you less likely to open an account with ING or Ally? Is the hard credit inquiry worth it?

7 Responses to Banks Do Hard Credit Inquiries On Checking Accounts

  1. This would definitely make me less likely to open an account with ING or Ally. I have too many accounts now, anyway, so the likelihood of me opening another account is slim. I wonder if opening a 403(b) with USAA will require a credit inquiry? It’s not a bank account, but it’s a financial account. That wouldn’t deter me, but it makes me wonder.

    • Daniel says:

      @Little House, I doubt it. Savings accounts rarely if ever have checks done before they are accepted. The reason for this is that there is no risk of losing money for the bank.

      With checking accounts, there is a risk of overdrawing the account, and the basic checks most banks do will tell them if you are frequently delinquent and if you are too likely to cost them money.

      With the 403(b) account, you are dealing only with your money, not USAA. They have no risk of you running off with even a penny of their money, so why would they go through the costs and hassle of running a credit check?

  2. Jerry says:

    I had no idea about this. I used to think that ANYONE could get a checking account. In light of all that has happened with credit, I guess this is a little insurance for banks to these checks. I don’t really blame them. If it leads to a little more security for them, that’s probably a good thing.

  3. Jenna says:

    What about those people who are just getting started and have no line of credit. How do banks assess that?

    • Daniel says:

      @Jenna, In speaking to some of the representatives, it sounded like no history is better than bad history. There are many students who are looking for checking accounts and several people assured me that it would not be a problem. They are more worried about negative information than no information.

  4. Kevin says:

    I have horrible…horrible…call the police terrible credit. I’m in ChexSystems for owing money to both Wells Fargo and WaMu for INSF…I just signed up online and got an account with ALLY. Is it too good to be true? I’m finally getting back on my feet and need a checking account. Are they going to send me a letter in 10 days and say, “oops, just kidding?”

  5. Checking Account Promotions says:

    This may end up hurting a lot of people who were looking to use internet checking accounts now that more traditional banks are trying to find every way to nickel and dime their customers.

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