Most consumers know about credit checks when applying for a loan, but few realize banks use a similar system when considering new accounts, and that information often can be incorrect.

Companies sift through your banking history, and relay that information to banks who can deny you an account if need be.

“Certainly it will show overdraft history, give the bank a general idea of unsatisfied balances and history of fraudulent check activity,” says Kelly Goulart with the Independent Bankers Association of Texas.

This helps protect banks against potential fraud.

“Some people will quickly open a checking account, process checks as fast as they can and see if they can get away with it,” he tells KTRH News.

However, information such as your address or Social Security number can be wrong, giving the bank inaccurate data to deny you an account. 

Consumers must contact these companies directly.  The most common is ChexSystems, which actually offers a product called FraudFinder.

Goulart says its up to consumers however, to stay on top of things.

“Talk to the bank and find out,” he says. “Each bank sets their own standards and reviews those reports independently, so one bank may deny to open an account based a small charge three years ago, and another bank may not.”