Why a credit check

Credit check: when and why the creditworthiness is checked

The most important thing about credit checks

What is a credit check?

Banks and companies check the creditworthiness of their potential business partner in order to rule out the risk of loss as much as possible. A contract is only concluded when the partner proves to be creditworthy.

When is such a test carried out?

Credit checks are always carried out when a business involves a financial risk. For example, a bank requires the potential borrower to provide SCHUFA information.

Which data are particularly relevant for the credit check?

When assessing the creditworthiness, the previous payment history of the person concerned is decisive: Have there already been irregularities, reminders or even insolvency proceedings? Or has he been reliable and financially strong up to now? For details, click here.

Credit check - a simple definition

Lenders want the loan to be repaid at some point. Dealers charge a purchase price for their products. However, if the business partner does not pay, those affected make losses. To avoid this, companies carry out a credit check. You ask how creditworthy and reliable is your potential business partner. So secure yourself against that Risk of financial loss from.

The result of this credit check is decisive for whether the two parties, e.g. lender and potential borrower, get into business at all, and if so, under what conditions. So if you want to take out a loan or rent a new apartment, you will only be able to do so if you can prove your creditworthiness.

Credit checks are only permitted if there is a legitimate interest

The company that wants to do a business with someone will check their creditworthiness beforehand. To do this, it either uses information that it already has or requests additional data such as B. Proof of income. Or the company picks up Data from a credit agency by either inquiring there or requesting credit information from the potential contractual partner.

Such a credit check is only permitted if the consumer to be checked consents to it or if the contractual partner agrees legitimate interest Has. Such an interest, for example, represents economic risk dar, that the other part cannot or does not want to pay.

The typical transactions for which credit checks are common include the following contractual relationships in particular:

  • Loans and loans, including overdraft facilities
  • Cell phone contracts
  • Purchase on invoice
  • Real estate purchase

These data play a role in the credit check

Personal data like Name, gender, age and address are seen rather neutrally in a credit check. At best, they provide clues as to how other people from the local area or with a similar family or occupation behave in financial transactions. These data usually have no influence on personal creditworthiness. In the exam, that is above all previous payment history is important.

Companies and banks provide this information through their contractual partners to the credit reporting agencies. These include B .:

  • Data about existing bank accounts
  • Credit cards
  • Contracts with mobile phone providers, leasing companies and online retailers
  • current loans
  • Claims not paid despite two reminders

Other relevant for the credit check Data refer to the credit bureaus from public registers, about:

SCHUFA or the respective credit reporting agency evaluates all of these said data using a calculation formula and thus determines a specific one Score valuethat indicates how likely it is that the person concerned will meet his payment obligations. This scoring procedure differs from credit agency to credit agency, whereby the calculation formula is a well-kept secret.

What to do if the credit check turns out negative?

The basic rule is that the creditworthiness or Credit rating all the better is the higher the score fails. At SCHUFA z. B. a score of 95 percent or more is considered good, 97 percent are even very good.

On the other hand, if the credit check certifies you one bad valueso it can following reasons to have:

root causeTips for improving your own credit rating
Expenses exceed incomeKeep budget books and prioritize expenses;
Reduce costs or save entirely
outstanding claims not paid on timeAlways pay bills on time;
Contact creditors immediately in the event of financial problems and negotiate a solution
too many credit inquiries (gives the impression that the person concerned is not getting any credit)always submit a condition request first instead of a loan request
(Condition inquiries do not have a negative effect on the creditworthiness.)
too many outstanding loansAvoid consumer credit;
Do not use the overdraft facility permanently
Credit agency has saved incorrect datacheck your own creditworthiness regularly;
Provide evidence of incorrect entries, report to the credit agency and insist on their correction

Own credit check: Possible and useful free of charge

Every consumer can check his own creditworthiness at any time, free of charge. Before May 25, 2018, the credit check for private individuals was free of charge once a year. Due to the General Data Protection Regulation, consumers can request credit checks more often free of charge. According to recital 63 to this right of providing information to Art. 15 GDPR should "the data subject" exercise this right "can perceive at appropriate intervals“.

However, the ordinance does not clearly state at what intervals a free credit check should be possible afterwards.

In the SCHUFA can you Online credit check request by clicking on meineschufa.de the option "Data copy according to Art. 15 GDPR" choose. The information will be sent to you by post about four weeks later. Other credit agencies provide the credit report directly online.

Tip! Use this option regularly to check whether the data stored there is correct and to have it corrected if necessary. This is how you prevent mistakes from negatively affecting your creditworthiness.

Credit without credit check

When a financial institution declines a loanthen you should do this as a Warning sign and take a closer look at your financial situation. New debts, e.g. B. in the form of a loan, are not recommended in this situation.

It is hardly possible to get a loan in Germany without (positive) SCHUFA information because Banks and credit agencies always work together. On the one hand, the lenders protect themselves against the risk that the borrower will not repay the money. And on the other hand, the person concerned is also in front of a Over-indebtedness protects.

There are credit intermediaries, the so-called "Loans without SCHUFA" to offer. Threaten here high fees. Whoever pays this has no guarantee that he will receive the desired loan. Foreign banks grant loans without credit checks by SCHUFA. They still check whether the potential borrower is creditworthy and they often request it high interest rates.

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Credit check: when and why the creditworthiness is checked
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