Before you can obtain a loan, lease or credit card, you have to pass a credit check. Banks do this to ensure that the borrower is able to fulfil the obligation, to avoid over-indebtedness on the part of the borrower and to reduce the risk of default for the lender.
1 What does creditworthiness mean?
A person's creditworthiness indicates how reliably they can and will fulfil their financial obligations. Both the financial situation and the person's assumed willingness to pay are taken into account. Banks therefore check the creditworthiness and credit standing of their customers.
2. creditworthiness: Can the customer pay?
Creditworthiness includes the question of whether you as a customer can repay a loan. This involves analysing your budget: Is your income sufficient for the desired loan amount?
The minimum requirements for the creditworthiness check are prescribed by law. For example, the borrower must be of legal age and be able to repay the loan including interest within 36 months. The decisive factor here is the disposable income, which corresponds to the non-garnishable income in accordance with the Debt Enforcement and Bankruptcy Act and cantonal guidelines.
Disposable income = net income minus Minimum subsistence level
The requirements for calculating the budget are set out in the Consumer Credit Act (KKG) and must be adhered to by banks.
3. creditworthiness: Does the customer pay back?
Creditworthiness indicates how reliably you as a customer can repay a loan. Your financial reliability is considered for this purpose. It includes:
- the payment behaviour in the past
- Existing liabilities
- Possible negative events such as debt collection or debt collection claims
On the other hand, you can improve your creditworthiness in the long term by maintaining these factors. Statistically conspicuous risk factors such as age, nationality, residence status, place of residence or frequency of changes of residence and workplace are also included.
Credit banks obtain this information from credit rating databases, the Central Office for Credit Information (ZEK), debt collection offices and residents' registration offices. Your chances of obtaining a loan and the conditions are therefore influenced by this data.
In Switzerland, there are four credit agencies that collect and offer creditworthiness data: CRIF, Intrum Justitia, Dun & Bradstreet and Creditreform. These are not only requested for the granting of loans: when ordering goods online on account, concluding mobile phone contracts or even when renting flats, companies and, less frequently, private individuals are interested in checking your credit score. You do not have to consent to the collection of this data. However, the databases must comply with the Data Protection Act. Anyone requesting information must be able to demonstrate a legitimate interest in your data - for example, through a credit enquiry.
4. those who do not pass the test will not receive a loan
A credit check is mandatory before any loan is granted. Anyone who does not pass the check will not be granted the desired loan. Every credit enquiry is registered with the Central Office for Credit Information (ZEK). Open enquiries are stored for as long as they are valid.
A rejection remains visible to the affiliated credit banks for two years. This can make it more difficult to obtain the desired loan. Or it can have a negative impact on the conditions. For this reason, you should avoid loan rejections and multiple enquiries as far as possible.
Find out what the ZEK stores and how long the data is stored.
The problem from the customer's point of view: For security reasons, the banks do not provide any information on their risk policy. If you are rejected, you will generally not receive a reason.
5. interest rate depends on the credit rating
As a general rule, the riskier your profile is from the bank's point of view, the higher the interest rate on the loan. The less risky the bank considers you to be, the lower the interest rate. The detailed risk assessments are not the same for every lender, can change at any time and are only partially publicly accessible for security reasons. Even if you are turned down, you will not usually be told why you have not been granted the loan.
Caution: Applying for a loan from several institutions at the same time does not make a good impression. Open enquiries are visible at the ZEK for as long as they are valid. As a customer, parallel enquiries make you less attractive to banks. If you are rejected, this can affect your chances of obtaining a loan from another bank or lead to higher interest rates. Therefore, place your enquiry with the bank where you have the best chances with your requirements.
Our tip: We can support you in your search for a suitable loan bestfinance.ch checks your data before the loan application is submitted to a bank. This increases your chances of a favourable decision and reduces the risk of negative ZEK entries.