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Bad Schufa score? How to increase your credit rating

No loan without a credit check: Your bank will only lend you large sums if you meet certain criteria. But what exactly does creditworthiness mean? And what can you do if your credit rating is too low?

In order to get a loan, you must have one thing above all else: a sufficiently good credit rating. Banks, savings banks and other credit institutions check these very carefully.

But what does that actually mean? We explain what the term creditworthiness means, what it means for you as a potential borrower and what you can do if the bank considers your creditworthiness to be too low.

What is credit rating?

If banks and credit institutions look at your creditworthiness, they will know quite well afterwards, whether she should give you a loan or rather not. The credit rating provides information about whether you will repay the money on time and in full.

So she not only reveals to the bank whether you will have enough funds in the long runbut also how high yours Payment behavior estimated will be. Or in short: how well you can handle money.

The higher your credit rating, the more certain the bank can be that it will get the money back. For you this means: the higher your credit rating, the higher the probability that you will get the loan you want. And: The loan will be cheaper for you.

The other way round applies: the higher the probability of one Payment defaultthe worse your credit rating. Then the bank will likely conclude that you are not creditworthy - and the loan will be declined. Even an installment purchase, mobile phone or rental contract can slip through your fingers.

How is the creditworthiness checked?

The banks get information about your creditworthiness from the Schufa or other credit agencies such as Crif B├╝rgel or Creditreform. However, contrary to what many people think, these are not government agencies - but private companies.

In order to check your creditworthiness, Schufa looks, for example, at data on bank accounts, credit cards, loans, leasing and installment contracts as well as any collection procedures, credit inquiries and entries in public debtor registers.

You can use so-called Negative features bump. For example, any kind of debt or bills and installments paid too late. Negative characteristics always have a bad effect on creditworthiness, but there are Differences between soft, medium, and hard features.

The transition between soft and medium negative features is fluid. They also have a comparatively low informative value, whereas hard negative features confirmed by court are or it is up to them final judgment underlying. As a result, they are considered powerful evidence of a rather low credit rating.

Examples of hard negatives are:

  • Failure to provide asset information
  • Excluded or unproven creditor satisfaction
  • Bankruptcy proceedings

From all this data, the Schufa then determines a so-called Score. This indicates how likely it is in general that you will repay your debts or, vice versa, how high the risk is that you will not do it at the moment. The latter is called Probability of failure.

However, a score from a credit agency such as Schufa is not all the bank needs to estimate your creditworthiness. They are also important Amount of your income, Information about, how safe your job ishow high your expenditure are whether you family have and where you live. The bank wants to know all of this from you.

How do I get a good credit rating again?

To get more creditworthy, here are some tips to keep in mind:

  • Check yours regularly Schufa credit report and put in case of errors immediately Contradiction a. This self-assessment shows you which data is stored about you. You can apply for Schufa information once a year free of charge.
  • Pay bills, installments and other loans in time. That shows good payment behavior.
  • If you obtain several loan offers, make sure that the banks with the Schufa one "Request credit conditions" and not make a real "loan request". Because many credit inquiries have a negative impact on your creditworthiness.
  • Quit Accounts and Credit cardsthat you don't use. A high number of bank accounts also casts a bad light on you.
  • The other way around, it goes down well when you with your checking account Show consistency and have been using it for a long time.