Are you considering taking out a loan to finance your wish? Then you should definitely know what Credit record is and how it affects your credit terms.
Credit record stands for the “Protection Association for General Credit Protection” and is the largest and most recognized credit agency in Germany. Credit bureaus are there to collect data about the payment behavior of citizens and use it to assess their creditworthiness. If you are interested in a loan, it is not possible without Credit record with a German lender. All credit institutions in Germany are obliged to check the creditworthiness of the borrowers. On the one hand, this protects banks and lenders from customers who do not repay their debts, on the other hand it protects borrowers from over-indebtedness. If you are unable to make your repayments, it is not a good idea to apply for a loan.
What data does Credit record collect?
Credit record collects personal data such as name, date of birth and address. Furthermore, it collects data about your solvency.
- Information about your bank accounts and credit cards
- Mobile phone contracts
- Installment payments
- Loans and guarantees as well as possible payment defaults
If you fail to meet your repayments, this will be recorded negatively by Credit record. This reduces your Credit record score, which is crucial for lending. If you properly repay all your liabilities, Credit record will again record this positively.
Information on occupation, income, assets, purchasing behavior, nationality, membership, and marital status does not collect the Credit record.
How does Credit record get my data?
Credit record receives your data from over 9000 contractual partners, including banks, telecommunications providers and debtor lists.
Can I view my Credit record data?
Yes. You can view your data at any time. If you want to use this option more often and regularly, this is associated with additional costs. You pay 9.95 USD once and then 3.95 USD per month. The minimum term for this service is one year.
However, you have the option to view your data free of charge once a year. Choose the information data overview according to § 34 BDSG. You fill out the form in the appropriate language and send it back to Credit record by post together with a copy of your identity card or passport and the registration certificate. After Credit record has processed your request, you will receive a letter with all the data that Credit record has about you. You will also receive information on where this data comes from and to whom it was forwarded.
The free application is good for always having an overview of your Credit record evaluation. Finally, the commitment and the credit conditions depend on the valuation. Here you will find the form in German.
Can I have negative Credit record entries deleted?
Yes, but only those entries that have been made incorrectly. If you have paid your invoice, but this does not appear in the Credit record data, you can send a formal letter to Credit record.
It is also best to add information that supports your cancellation request (eg confirmation of timely payment, etc.).
How long does Credit record store my data?
Credit record only stores your data in accordance with the legally permitted terms, after which all entries will be deleted.
- Information about inquiries after 12 months (will only be passed on to contracting parties for 10 days)
- Loans 3 years after the year of repayment
- Information about claims due after 3 calendar years (if repaid)
- Information about claims due after 4 calendar years (if not repaid)
- Bank accounts after the closure
- Credit cards 3 years after the business relationship
- Information about the opening of consumer / bankruptcy proceedings after 6 full calendar years
As you can see, most information is deleted after 3 years. Generally, only 90% of citizens have positive entries. The likelihood that you will also belong is therefore very high.
What role does Credit record play in lending?
The lender applies to a Credit record for a “Credit record-neutral request for loan terms.” As a result, the bank receives your Credit record score. The higher the Credit record score, the higher the chance that you will get a loan. Of course, the level of the score also affects the loan conditions, especially the interest rate.
How does scoring work at Credit record?
The base score represents the probability that you can meet your payment obligations. This value is calculated based on the last three months and takes your previous behavior into account. The base score is not passed on to the companies and is only for your orientation.
Scoring process and score value
Based on your payment history, Credit record calculates the likelihood that you can meet the liability for your partners. The higher the score, the better. Nobody gets a 100% score. However, if you are over 95%, that’s a very good result.
The score goes from 0 to 1000. The higher the better. 0 – stands for extremely bad payment behavior in the past. 1000 – is the ideal Credit record value. 1 – can be interpreted as bad payment behavior, often you get the value 1 even if there is no data about you or you have recently moved.
The exact calculation of how Credit record gets your score is not known. However, it is discussed that the following items negatively affect your score:
- Frequent account changes
- Multiple checking accounts and credit cards
- Unreliable payment behavior
You should therefore only keep those accounts that you actively use and that you should always settle all your liabilities on time.
Can I apply for a loan without Credit record information?
Yes, but only to a limited extent. In principle, no installment loans and other earmarked financing in Germany without Credit record information. There are several alternative options, especially to apply for a loan from abroad. This type of loan is also known as a Swiss loan. Foreign banks do not access the Credit record data. Your creditworthiness will be checked anyway. A loan without Credit record is arranged through German credit intermediaries and paid out by banks from abroad.
Another option would then be a personal loan. Your Credit record data is checked here, but the score is not rated as strictly for private loans. Private investors decide on the loan approval and not the bank.
What data does the lender receive?
The potential lender only receives the most important data such as the base score. Only you have the possibility to view all data. In addition, a Credit record partner can only view your score if he receives your approval. You must therefore show interest in applying for a loan so that the lender can view your data and then submit a loan offer to you.