Chexsystems is the electronic fund checking system to verify service and consumer credit reporting agency like Experian, Equifax and Transunion. While credit reporting agencies record data, as to the manner in which the consumer handles credit relationships, Chexsystems provides data related to the way a consumer handles deposit accounts at banking institutions.
Chexsystems identify irregularities of consumers like cheque overdrafts, not up to the mark balances, if a consumer has deposited any fraudulent check or if any consumer has had suspicious accounts in the past five years. Most of the banks will never open an account for a customer if he has had a negative instance against him, in any bank.
Chexsystems got its recognition in 1999, as a consumer reporting agency and is governed by the Fair Credit Reporting Act. This electronic system has brought about another revolution that helps to keep a check on frauds that may be happening around.