- Important distinction: The topic of credit and Credit Bureau usually leads to confusion. It makes a difference whether you are looking for a loan without a Credit Bureau query or a loan without a Credit Bureau entry.
- Credit without Credit Bureau query: With a credit without Credit Bureau query, the bank would grant you a loan without obtaining Credit Bureau information for the decision. However, this does not mean that the loan agreement is not reported to Credit Bureau.
- Credit without Credit Bureau entry: For a loan without Credit Bureau entry, the bank grants you a loan without this being reported to Credit Bureau. This is often the case with small loans. However, this does not mean that the bank does not check your Credit Bureau information in advance.
Whether a loan without Credit Bureau makes sense!
If you want to take out a loan from a bank, there is no way around the Credit Bureau query. In most cases, negative Credit Bureau entries lead to the loan being rejected. At least the loan is much more expensive.
What does the Credit Bureau information actually mean and are there also options for a loan without Credit Bureau ? These questions will be answered below.
What is the Credit Bureau and why is it needed?
“Credit Bureau” stands for “Protection Association for General Loan Protection” – the largest credit reporting agency in Germany. The Credit Bureau history goes back to the 1920s. However, the current structure with Credit Bureau Holding AG as the roof has only existed since 2000. Credit Bureau is supported by banks, large trading companies and other service providers. These are typically industries that are interested in the Credit Bureau data.
Credit Bureau stores more than 800 million entries from around 67 million Germans . This means that practically every adult in Germany can be found in the Credit Bureau database. The stored data concern contracts with regular payment obligations, payment behavior and payment disruptions. Even if solvency is questioned over the long term, this is “noted” at Credit Bureau.
A company that is a Credit Bureau partner can use Credit Bureau queries to get an impression of the solvency and willingness of its customers to pay . This is important information when deciding whether a deal should be closed at all. For banks, the Credit Bureau query is an indispensable part of the credit check.
What does Credit Bureau provide information about?
The Credit Bureau stores a lot of data, but does not disclose it completely when queried. According to Credit Bureau, only data are provided that are necessary for a trusting business relationship . Credit Bureau partners also generally only receive relevant data sections. A distinction is made between A and B contract partners. Banks usually belong to the A category. These partners receive both stored positive and negative characteristics about the person concerned, who must always give their consent to the Credit Bureau information.
The positive features are about existing credit relationships with (other) banks or credit card companies. The negative characteristics – if available – list “abnormalities” in payment behavior from all contractual relationships recorded at Credit Bureau. An important additional and summarizing information is the Credit Bureau score.
What is Credit Bureau scoring?
Credit Bureau scoring is an instrument that compresses the data stored at Credit Bureau into a point value using mathematical-statistical methods. This can be used to derive the probability that a customer will default on payments – a very important piece of credit information.
When asked, Credit Bureau partners receive the “normal” information and the score value that they can use for their credit rating . A special bank score is provided for banks. How exactly the score is calculated and how individual characteristics affect it is a well-kept Credit Bureau trade secret. It is immediately obvious that negative characteristics worsen the score.
What role does Credit Bureau play in credit inquiries?
If you ask for a loan, Credit Bureau comes into play. A distinction must be made between pure condition requests and “real” loan requests in the sense of loan requests. A condition request is a non-binding request from a bank about the conditions at which a loan would be possible. This is the only way to make targeted comparisons, because the individual creditworthiness of the requester is taken into account when determining the conditions. This is not possible with general condition information.
Condition requests are reported to Credit Bureau with the characteristic “KK” (condition request) . However, they have no influence on the credit rating. Other banks cannot see them either. The feature is automatically deleted after a short time. Inquiries about the condition, as they can be made via our comparison portal, are therefore actually shop-neutral and without any risk.
It looks a little different with a “real” credit request . This takes place when a signed loan application with the necessary documents is submitted to a bank – i.e. the loan is specifically and bindingly sought. Here the characteristic “AK” (credit request) is reported and remains with Credit Bureau for one year. During this time, other banks can also see it when querying Credit Bureau.
Are there alternatives?
There are two other ways to get a loan despite or without Credit Bureau: short-term or small loans and the pledge.
1. Mortgage loan
The mortgage loan is a “classic” form of credit that has gone somewhat out of fashion. It works very simply: the pawnbroker grants a loan and receives a correspondingly “valuable” pledge as security. If the loan is repaid as agreed, the deposit is returned. Otherwise, the pawnbroker may utilize it and thereby “hold himself harmless”.
Since the lender already has his security in his hands, the usual credit check is not necessary . No Credit Bureau information is required either. The mortgage loan is a “real” loan without Credit Bureau, but the term is usually only a few months and does not offer more than bridging.
2. Short-term or small loans
Short-term or small loans are even shorter term . These are loans of a few hundred euros with a term of a few weeks and a maximum of three months. They are available through specialized online providers. The Credit Bureau is queried here, but the criteria are less stringent than for “normal” loans. Such a loan can also only temporarily fill financial gaps until the next salary is received.
What to do if credit grows over your head?
A loan without Credit Bureau is often particularly in demand when debts are in danger of getting out of hand. Borrowing is made easy today, and as more and more loans pile up, manageable amounts can become a problem with every single contract.
At some point, the “concentrated” rate burden is no longer bearable. And some borrowers have already lost track of their obligations. A Credit Bureau-free loan is then supposed to provide the solution to an acute debt problem.
As a rule, however, it does not solve the problem, but only exacerbates it. Even if the loan comes about, it ultimately only means another installment obligation. The next financial bottleneck is then inevitable.
It is better to put your debt in order and restore sound finances. This often happens through debt restructuring, by combining existing loans into a new loan, the rates of which are adjusted to the financial capacity.
Those who cannot do this on their own should not be afraid to use professional help through debt counseling. If you get a grip on the financial situation in this way, it is always better than the last resort, private bankruptcy.