A good credit rating can have an advantageous effect in many areas of life. For example, consumers with good credit ratings have better chances of getting a bank loan, have to pay less interest, are more likely to win the contract for a new apartment or to purchase an installment from a dealer. But many people don’t even know how creditworthy they are. If a loan application is then made, there is the nasty surprise: the loan application is rejected. It doesn’t have to be! German consumers have an influence on your credit rating. If you are planning to take out a loan soon, you should consider a few points beforehand.
Most banks use the credit record data as a basis for the applicant’s credit check. This information gives the bank important information about further loan liabilities, current contracts or payment behavior. All of this data is included in the creditworthiness assessment and can also be used to put together offers tailored to the applicant’s situation. If, for example, a potential borrower already has several current loans and applies for another installment loan, the bank can offer him rescheduling instead of an additional loan with an increase in the loan amount. This can reduce the monthly rate by up to 50% and thus significantly improve the credit rating.
Credit record is no longer up to date or even contains incorrect information
It has already happened that the conclusion of contracts was correctly recorded in the credit record file, but no corresponding update was carried out after it was terminated, with the result that contracts or liabilities that had long been completed still played a role in fact in credit record and thus worsened the credit record score. It is therefore advisable to check that the data stored with credit record is up-to-date and correct before taking out the loan. Once a year, consumers can obtain self-disclosure from credit record free of charge. If it then turns out that not all information is correct, credit record must update the relevant data on request – that is, change or delete it.
If you have accumulated several credit cards over time or opened different accounts, you should check whether you need them at all before you apply for credit. Because even a large number of credit cards and accounts can be interpreted as a possible signal for low creditworthiness. Banks also do not like the frequent change of provider. In contrast, banks rate it very positively if customers stay with a business partner in the long term and reliably meet their payment obligations over a long period of time.
Dealers are increasingly advertising with zero percent financing
Even if the offers sound tempting – do not take up every hire purchase offer from retailers immediately, just because it is a supposedly cheap offer! If your budget allows it, there is no reason to unnecessarily conclude financing – especially since high discounts can often be negotiated with immediate cash payment. If you really cannot afford the full amount, check before buying whether you can better do it with a low-interest installment loan. We already discussed in the article “Caution with zero percent financing” that there are often only simple marketing campaigns behind zero percent financing. In contrast to rigid dealer financing, installment loans offer significantly more flexibility in repayment.Anyone who has already made use of several dealer financings quickly loses the overview. credit record .A debt rescheduling loan, on the other hand, brings order and control to the monthly charges and, as described above, helps to improve the credit rating.
Researching the cheapest installment loan offer
it is generally advisable to obtain several offers in writing in order to be able to compare the interest rates and loan costs of different providers in black and white. However, when getting the offers, make sure that the credit record request is made under “Request credit terms”. Otherwise, soliciting multiple loan offers could be misinterpreted to mean that you desperately need money and have difficulty finding a lender. Too many credit inquiries (from three to five inquiries within a very short time) can have a negative impact on your credit record score. In contrast to the “Inquiry loan application”, the “Inquiry credit conditions” is neutral to the credit record , credit recordand therefore has no influence on your credit record score.
Your creditworthiness is also influenced by the decision whether you enter a second applicant in the loan application. For example, if you live in a firm partnership and your partner has his own regular income, the bank also takes both salaries into account when determining the creditworthiness of two applicants. The reduced risk for the bank is reflected in a significantly lower interest rate on your loan.