Credit Scores Can Run – and Ruin – Our Lives
There's yet another credit score type system that has significant effects on the ability to participate in the financial system that's much less known:<p><a href="https://www.investopedia.com/what-to-know-and-do-if-you-re-listed-in-chexsystems-5179535" rel="nofollow">https://www.investopedia.com/what-to-know-and-do-if-you-re-l...</a><p>It's known (quite infamously) to essentially keep unbanked populations unbanked. Long story short if you've had overdraft fees, bounced checks, etc opening new accounts at banks that utilize ChexSystems becomes nearly impossible.<p>On one hand there have clearly been people that have taken advantage of banks being siloed and abuse overdraft protection, etc to essentially get loans they can knowingly abscond with. Just move on to another bank. Repeat.<p>On the other hand, ChexSystems is much less well known and a bit more "shadowy". The old story of "I use my debit card, mismanage my activity against direct deposit/balance, get hit with overdraft, then overdraft again once the fee hits, etc and next thing I know I'm $500 in the hole because of a $2.50 debit at a convenience store and now I'm essentially banned from every bank."<p>In the case of the debit card example (or credit cards) banks could do what they used to and actually decline the charge. However they've clearly figured out it's much more profitable to allow the charge and just hit people with (often excessive) overdraft and over credit limit fees.