Many consumers are familiar with the term “Credit Bureau Score”, but very few know what it means. The Credit Bureau – Protection Association for General Loan Protection – is a credit agency that collects data from consumers who open an account, apply for a loan, conclude a cell phone or leasing contract and much more. A customer’s creditworthiness is determined on the basis of the Credit Bureau score, ie how likely it will be to repay a loan.
What is the mysterious Credit Bureau Score?
The mysterious Credit Bureau entries that deny some consumers a loan, what is that actually? For some it is a trustworthy credit agency, for others it is a data eater. Around three quarters of all consumers in this country are recorded with sensitive data in the Credit Bureau. Credit Bureau is controversial and some fear it too, because bad Credit Bureau information prevents a loan, a cell phone contract or an overdraft facility. According to the Credit Bureau Score, even a building loan can burst.
What is the Credit Bureau Score? The score is a value that determines the creditworthiness of a customer. The score results from a statistical-mathematical procedure. There is also the so-called base score, which is a value of 0 and 100%. It is updated every quarter, so it is always up to date. The calculation works as follows: A percentage of 95% is to indicate that, in a group of 92 consumers, 92 consumers reliably pay their liabilities. The Credit Bureau score would therefore be 95%, very high and sufficient for a loan and also positive.
The lower the score, the less likely a loan approval is. The number ranges from 0-100.
How exactly the analysis of the score is going on, which data the Credit Bureau uses exactly, is not clear. Credit Bureau offers insufficient transparency here. In any case, some aspects can make the point value look negative. These are, for example, loans or mobile phone contracts that banks or companies have terminated if the consumer becomes insolvent.
Oaths of disclosure or enforcement proceedings also lower the score. In order to increase the score, the customer should pay his loans on time, even an early repayment can have a positive effect. In addition, the credit line granted should not be exceeded at the overdraft facility. Customers who know that there are negative entries in the Credit Bureau should check regularly with a self-assessment whether the entries are still right there. If entries were deleted, the Credit Bureau score would also rise again.
The loan despite the low score
A loan application was rejected, but there are no negative entries in the Credit Bureau? In many cases, credit approval is carried out automatically based on the score. For example, if it is 50%, there is a high risk that a loan default could occur. The only thing that helps here is a personal conversation with the bank, which then has a specialist review the loan application.
A low score can also arise if the income situation is not particularly good, from possible collateral and the budget. Nevertheless, a loan can be made possible despite a low score. First, banks use their own credit assessment, although the score doesn’t necessarily tip the scales. However, the basic requirements for a credit check are very much in demand at Credit Bureau.
If a loan is rejected despite a low score, the loan seeker can turn to the Credit Bureau-free loans. The money comes from abroad. Credit Bureau is not relevant there, it is not queried and the credit is not entered.
The loan from abroad
Credit Bureau-free loans have been around for a few years and are heavily advertised on the Internet. The peculiarity of these loans is that the donors do not ask Credit Bureau. The reason, in these countries there is no Credit Bureau in the sense like here in Germany. But these banks also require collateral. Normally, the income is checked, which must have a attachable share of at least 80.00 USD.
In the case of a single person, this is net 1,160 USD. A four-person household must provide evidence of around 2,500 USD net. Since the loan is secured through income despite a low score, the loan seeker must sign a corresponding certificate before the loan is approved, which allows the bank to immediately seize payment arrears. For this reason, there must also be an open-ended employment contract that has existed for at least one year. A trial period is also not recognized.
Unemployed, self-employed or freelancers are left out of the credit despite the low score, the unemployed receive state benefits that cannot be seized and the self-employed have no stable income.
Despite the low score, the loan amounts offered for the loan are $ 3,500 or $ 5,000 and, depending on the credit rating, $ 7,500. The terms of the three loans are 40 months. The interest rate is around 11-12%.
The loan from Germany despite a low score
If the foreign loan is rejected for whatever reason or if the customer does not want it, he can ask a Cream bank for a loan despite a low score. However, he will only receive a loan if he can provide appropriate collateral. This can be a property, a loanable life insurance or a second borrower or a guarantor.
If a guarantor is named, the guarantor, like the borrower, must also have sufficient income, an impeccable Credit Bureau and a permanent position. In addition, despite the low score, the guarantor of the loan should be informed about the risks of a guarantee. He should only sign a guarantee if he can easily pay any installments from the loan. The surety should also know that the guarantee reduces his own credit rating. The reason the guarantee is entered in the guarantor of the guarantor and added to his liabilities when a loan request is made.
If none of the aforementioned collateral can be provided, a loan from private individuals remains. This can be from relatives or friends. However, objectivity and correctness should come first. If funds come from relatives, for example, a written contract must still be drawn up in order to avoid disputes later under certain circumstances.