If you deal with loans, you will inevitably be confronted with the topic of Credit bureau at some point. For many, however, it may not be so clear what the Credit bureau Score is all about. But it is an advantage to deal with this matter. We want to answer the most important questions about Credit bureau in this article.
What is the Credit bureau?
Credit bureau Holding AG is the largest and most well-known credit reporting agency in Germany. Credit bureau’s task is to provide its contractual partners with information on the creditworthiness of third parties. The contractual partners are, for example, banks that grant loans. With third parties you are meant as a consumer. Credit bureau therefore tells a bank how creditworthy you are. Credit bureau needs and collects the relevant data for this. It also receives this from the contractual partners. In addition to banks, these can also be trading companies or telecommunications providers. For example, if you buy a washing machine in installments or conclude a new cell phone contract, this data will be passed on to Credit bureau and saved together with your contact details.
How is your credit rating measured?
First of all: The exact formula for calculating the Credit bureau score is not available to the general public. Credit bureau itself advertises its score procedure as transparent. However, the details are not visible. Only the responsible supervisory authority and the data protection officers of the federal and state governments know the exact formula. This always leads to criticism from consumer protection.
In any case, it depends on the data available. It can even be advantageous for you that data about you have already been deposited with Credit bureau when you apply for a loan. In rare cases, regional or geodata is used if the Credit bureau has no other information about a person. Your credit rating is then determined based on your neighborhood, which can be good or bad. But that is very rarely the case.
Normally, the Credit bureau score is determined based on the business you have already done. Mobile phone contracts, installment payments or loans taken out as well as current accounts are among the things that play a role. Based on this information and how reliably you have met the individual claims, it is calculated how likely it is that you can pay future due dates on time. If you have always paid everything back in a timely manner and the loans you have taken out are proportionate to your income, your Credit bureau score is in a positive range.
How does the Credit bureau score deteriorate?
If you do not meet the demands of your business deals, this will have a negative impact on your Credit bureau entry. If, for example, you are in arrears with the installments for a loan, this will be noted in the Credit bureau. But by repaying the liability, the corresponding entry is corrected. However, please note that in such cases only the addition “Completed” is added. The negative note is still visible. A credit despite a negative Credit bureau is possible, but it is offered to you on much worse terms. Generally, individual data in the Credit bureau that are considered to be completed are deleted after three years. Thus, such smaller delays have no long-term impact on your Credit bureau score.
The following factors have a really serious impact on your Credit bureau score:
- Personal bankruptcy
- An affidavit
- Seizure of account or wages
- A warrant
Such influences are the result of missed payment claims. While some lenders turn a blind eye to the first-mentioned negative entries, for example providers of mini-loans, the latter generally lead to a rejection.
Find out about your Credit bureau score
Once a year you can request information about your Credit bureau entry free of charge. If you are not sure about the status of your Credit bureau, it does no harm to use this service. Sometimes it can happen that a settled obligation does not automatically disappear. In such cases, you can request a correction of the information and have your Credit bureau entry deleted. This can make it much easier to apply for new loans or other businesses that affect Credit bureau in the future.