Not everyone has heard about ChexSystems and, considering how much of an affect this agency can have on your ability to open a bank account, that can be a problem. ChexSystems is a consumer reporting agency, just like Experian, Equifax and TransUnion. Those three are better known, because they report on your credit history and score and can affect your access to credit. ChexSystems, instead, reports on your banking.

How ChexSystems works

Banks usually will check your ChexSystems report before allowing you to open a new checking or savings account. Even one negative item on your report can be grounds for a bank to deny you an account. And since ChexSystems only records bad news, its reports can get you into some trouble. The way ChexSystems works is surprisingly simple: anytime a consumer does something wrong with his or her banking — bounces a check, overdrafts, runs a scam through a bank account — the bank has the choice to report it to ChexSystems. The last five years of reports on an individual makes up his or her overall Chex report.

ChexSystems doesn’t care about good news — even if you have a good overall banking history, your Chex report can be bad. And because banks want to protect themselves, as well as their other customers, they avoid offering accounts to individuals with anything on their Chex reports, when possible.

The situation isn’t entirely dire, though. Not all of your banking information winds up with ChexSystems, because your bank gets to choose what it will report and what it won’t. If, for instance, someone bounces a check but clears it up right away, most banks won’t report the incident. There are also some banks that will allow customers to open banks even if there are serious problems on their Chex reports — as long as those issues are several years in the past and all charges have been paid.

Get a copy of your Chex report

If you want to know exactly what’s in your Chex report, you can request a copy once a year — just like you can request a copy of your credit history from the three credit bureaus once a year. You can also request a copy of your Chex report if you’ve been denied a bank account in the past two months due to something in your report. To order your report, use Consumer Debit Resource’s tool. The same website provides a form to help you place a security alert on your Chex report if you have been the victim of identity theft.

Fix your Chex report

Unfortunately, improving is harder than improving your credit score. Your first step should be talking to a representative at the bank that issued the original negative report. You’ll have to work with them to settle the problem. Once the problem is settled, the bank will update its report to ChexSystems. Your Chex report will reflect the fact that you’ve paid or settled the account. The bank has the option of removing the issue from your report entirely, but that decision is at the bank’s discretion: you should make a point of requesting that your bank do exactly that — but there is no guarantee that they’ll do so.

If you’ve been watching the news this week, you’ve seen that a number of financial institutions are struggling. Washington Mutual is particularly in the spotlight — while WaMu claims to have enough capital to make it through these difficult times, two ratings agencies have downgraded its debt.

WaMu is the largest savings and loan in the U.S. But with the downgrade of the company’s debt, it’s clear that not all of WaMu’s creditors think that they’ll last. The bank’s stock prices look like a roller coaster — with a major downward trend. So far this year, WaMu’s stock has fallen almost 80 percent.

While investors are particularly worried, those of us with accounts at WaMu may not be too heappy either. Things aren’t dire, but it’s time we start keeping closer tabs on what our particular banks are up to.

Bankrate is a good place to start if you want to check up on your bank’s rating. The site provides you with two different scores for any bank or credit union you look up. The first is the Bankrate.com Rating, a scale of one to five, with five as the best. The second is the Safe & Sound CAEL (Capitalization, Asset Quality, Earnings and Liquidity) rating, a scale of five to one, with one as the best.

If you look up a few banks through Bankrate, you’ll notice that most banks are doing okay and some are doing poorly. Basically, no bank is scoring higher than a 3 and 3 rating. There are multiple listings for some banks that do business in multiple areas. The Washington Mutual Bank (Henderson, Nevada) has a 1 and 5 rating — the worst you can get.

These ratings aren’t perfect indicators — and not all of them have been updated recently. AIG, also in the news today because the company needs as much as $75 billion to stay afloat, still has a rating of 3 and 3.

Despite imperfect ratings, Bankrates remains a good starting point. I wouldn’t pull my money out of a bank just because of their rating, but Bankrate’s information provides a good starting point for further research.

Beyond Bankrate, you have a couple of options for tracking information about your bank. You can stick to newspaper articles — but the nature of newspaper reporting is that they’re talking about something after it happens. Instead, I’d recommend look at the information available to investors considering buying stock in your bank. Information like where the stock is trading can help you determine how investors see your bank. Whether investors are willing to buy a given stock indicates whether experts think that a financial institution is going to rebound. If a stock’s price is dropping, however, you know no investors wants to take the risk.

Can you afford that kind of risk? You’re actually in a better situation that investors. The FDIC probably guarantees your deposits, meaning that if a bank goes under, you will still have your money. Just the same, we should all be keeping a close eye on just how our banks are doing.

So, you’ve been reading up on all the latest schemes and plots that thieves use to steal your money. You’ve read about devices that grab your passwords out of thin air, people who will dig through your leftover spaghetti for a bank statement, and all sorts of other frightening things. Well, I’m here to tell you to relax for a moment. There’s a difference between being vigilant and cowering in a corner of your room, afraid to leave the house. Banks are your first line of defense, and they’re working very hard to make sure thieves don’t get past them.

It used to be that a banks main concern was keeping its money safe. Bigger locks, thicker doors, better alarm systems, all to make sure those dollars in the safe were just that, safe. Now the focus has shifted. Stealing cash from a bank is as simple as asking for the money. Tellers are trained to follow directions of any robber and give up money without protest, even if there is no weapon. They’re told to wait until the robber has left the bank before hitting alarms or even telling supervisors. Robbing a bank is the easiest thing in the world (it’s getting away with it that poses a problem).

So if the bank isn’t trying to keep your cash safe, what are they doing? They’re working very hard to keep your identity safe, which is even more valuable. From high tech online banking security, to simply training employees, banks are focused almost entirely on keeping your information private. Although there are federal regulations in place to keep you safe, most banks go above and beyond this and hire private security firms.

So the next time you’re asked for your identification at the bank, don’t be insulted! They’re doing their best to make sure that your information is safe. Being asked for ID is one of the major complaints I have heard from customers of my bank. They find it rude, and are upset that the bank doesn’t trust they are who they say they are. However at the same time they are extremely upset if an unauthorized transaction happens on their account. You can’t have it both ways, so banks have chosen to ask everyone for ID. It’s simply the world we now live in.

Generally speaking, the only information you will get from a bank will be about accounts you own. Banks are particularly sensitive to people “fishing” for information. Therefore you won’t be told balances on accounts, status of accounts, or even if an account exists unless you’re a signer on them. This might be frustrating to some people, who may have legitimate reasons to ask, but overall the bank will take no risks.

Banks are there to protect your money, and even more importantly your identity. Believe it or not, it is much worse to be the victim of identity theft than to have all your money stolen. That’s why banks are doing everything they can to keep your information safe, but you still have a part to play. Make sure you’re not leaving your bank statements around, don’t give out your pin number to your card or your online banking, and make sure that your checkbook is secure and doesn’t get lost. If you think that any of these things are compromised, tell your bank immediately. If you work together with your bank, your identity will be as safe as your money is behind that big steel door.