California Banks & Credit Unions That Don't Use ChexSystems

Having to rely on check-cashing places or pre-paid cards to make transactions can be inconvenient and expensive, but 1M+ California households struggle to access traditional banking methods, due in large part to the activities of ChexSystems. If you’ve had banking troubles in the past, if you are struggling to open an account, or if you are in the middle of a ChexSystems dispute, then you should avoid ChexSystems the next time you open an account.

In this article, we’ll explain what ChexSystems is, how it impacts your banking options, and the best banks Californians can use to avoid them.

What is ChexSystems?

ChexSystems is a credit-reporting agency that banks use to run risk assessments on account applicants. Their job is to monitor certain banking activities (e.g., bounced checks, returned checks, and account closures). If your bank or credit-union account is closed, then the bank can report the closure to ChexSystems, who will then report it to credit bureaus. While it won’t directly impact your credit score, it can make it exceedingly difficult to open a new account, as other banks may deny you based on information found in your ChexSystems report. They typically keep records of closed accounts for five years.

Although ChexSystems performs a similar function as credit bureaus, they have no impact on your FICO score. Instead, they use their own metric—the ChexSystems Consumer Score. No assessments of your credit or loan history are factored into this score. It’s calculated solely from records related to your banking activities (e.g., new account applications, garnishment subpoenas, overdrafts, negative balances, account closures, and unpaid checks).

Fortunately, you don’t need to rely on banks that use ChexSystems to jumpstart your banking needs. Keep reading for the best California banks that don’t use ChexSystems.

Truist Bank – Fundamental Checking Account

Pros: Low minimum deposit to open, no minimum balance, educational resources

Cons: Monthly fee of $5, no interest

Why We Recommend: The Fundamental Checking Account restores reliable access to banking tools, which are necessary for anyone who’s recently been between banks. There’s also no minimum balance, which is ideal if you tend to carry lower account balances. They also offer free educational resources to help you better manage your resources and avoid further banking troubles in the future.

Summary: This is a basic, low-cost checking account from one of the 10 largest banks in the US. It has everything you need to make digital transactions quickly and easily.

Sofi Bank – Checking and Savings

Pros: Early direct deposit, no overdraft or monthly fees, $300 direct-deposit sign-up bonus

Cons: No branch locations, fee for cash deposits

Why We Recommend: Sofi offers the opportunity to make your money grow as you bank. Not only does your balance earn an annual percentage yield of 1.25%, but you can also earn up to 15% cash back when you use your Sofi debit card to make purchases from local businesses. You can also get your paycheck up to two days early, which can help you avoid overdrafts and overdue bills.

Summary: This is a high-interest-earning account with convenient ATM access and minimal fees. It has good remote customer service but may not be suited to those who prefer banking in person.

Current – Current Premium Account

Pros: Extremely competitive APR of 4.00%, free withdrawals at 40K+ ATMs, rewards debit card

Cons: No phone customer service available, fee for cash deposits

Why We Recommend: Current offers a high APR of 4%, which is 6X the national average. They also offer a points system on their debit card, with which you can earn cash back, and an immediate hold release on gas purchases. It gives people with spotty banking history the opportunity to save money and rebuild their finances. Current’s Overdrive product provides overdraft protection of up to $200 for all customers who set up direct deposit.

Summary: Current has one of the most competitive interest rates in the industry, thereby making it easier for your money to work for you.

Sable – Checking Account

Pros: Open an account in as little as five minutes, opportunity to earn an unsecured credit card

Cons: No sign-up bonuses, lower rewards percentage than some competitors

Why We Recommend: Sable has no fees, credit checks, or minimum deposit. There’s also no need for a Social Security Number when you apply, thereby making it a strong choice for non-citizens. They also offer multilingual support. You get a secured credit card as soon as you sign up, and you can graduate to an unsecured card 3X faster than at a traditional bank. You will also have access to free credit coaching.

Summary: This is an excellent option for people who are looking to build or rebuild their credit as quickly as possible. It offers multilingual support and has no need for your Social Security Number, thereby making it convenient for non-citizens. It offers rewards when you shop at Amazon, Netflix, Hulu, UberEATS, Whole Foods, and more.

California Coast Credit Union

Pros: Minimum initial deposit of only $25, no monthly fees, telephone banking, free Mastercard debit account

Cons: ChexSystems check for some applicants

Why We Recommend: California Coast Credit Union offers 5% back on some local debit-card purchases, and advanced security features (e.g., contactless debit). An account only takes $25 to open, which is one of the lowest initial deposits on the market. It offers basic account features that are good for people trying to get back on track. Although California Coast Credit Union does use ChexSystems, it’s very forgiving to applicants (provided there’s no history of fraud).

Summary: Great for Californians who are in financial recovery, have fraud concerns, or like to get rewarded for shopping locally. This may not be the right choice for people with a history of committing fraud in their ChexSystems report. Such applicants are subject to rejection.

Learn more about California Coast Credit Union

FSNB

Pros: Exceptionally low minimum initial deposit of only $5, no credit check, savings round-up

Cons: Minimum account balance required

Why We Recommend: If you’re recovering from financial hardship and don’t have a lot of money, then FSNB makes it easy to get back into the world of digital banking with an exceedingly small deposit of $5. People with poor credit will appreciate that no credit check is required for this account. They also have several branch locations, and they offer text banking and online chat. Their savings round-up program is an easy, hassle-free way to start building your savings again.

Summary: Physical branches and a variety of digital banking options make this a great pick for people who prefer human interaction over solely using mobile apps for their banking needs. Accounts offer a full range of services for all your banking needs. However, if you want to avoid fees, you must commit to keeping your balance at $75 or more. You must maintain a balance of $500 or more to start earning interest.

Learn more about FSNB

Bank of the Sierra

Pros: No minimum-balance requirement, no overdraft fees, safe and affordable, eco-friendly

Cons: Must apply in person to avoid a ChexSystems check

Why We Recommend: Their Essential Checking Account provides basic banking without heavy fees or complicated rules. Get free mobile deposits, a debit card, free bill pay, and no overdraft fees. Also, when you sign up for eStatements, Bank of the Sierra will plant one tree in your name. If you care about the environment and want clean, simple, no-fuss banking, then Bank of the Sierra may be an excellent choice.

Summary: This is a basic checking account with all the features you’ve come to expect. It is best for people who live near a branch location, as you will need to apply for your account in person to avoid a ChexSystems scan.

Learn more about Bank of the Sierra

Even if you’ve had trouble in the past, restoring your access to online banking is possible with these options. Californians can enjoy the benefits and convenience of digital transactions without having to worry about past or future mistakes. Visit one of these banks’ websites or branches to open a new account and start fresh today!