Credit request and credit rating: you should pay attention to this!
What is a loan request?
The term loan request or loan application means the request to a bank or a savings bank for a specific loan. In order to answer this request, the bank collects information about your creditworthiness, also known as creditworthiness. In doing so, she contacts a credit agency, in most cases it is Credit Bureau. Further editorial at http://www.hibuffaloairport.com/consumer-installment-loans/
The bank sends your request there, reports the process as a loan request and then receives information as to whether you are a reliable loan customer or whether you have had difficulties repaying loans up to now. In this way, the bank checks whether you are creditworthy and whether it grants you the loan.
Banks immediately inquire about your credit rating with every loan request. It doesn’t matter whether the loan request is made online or in a branch. It does not matter whether it is a small loan, a $ 10,000 loan, a car loan, a loan for the self-employed or a real estate loan.
Already knew? In addition to Credit Bureau, there are other credit bureaus that store information about your payment behavior.
Too many loan requests can get expensive
Every credit request is saved at Credit Bureau for 1 year. It is also visible to other banks for 10 days. It becomes problematic if you make several loan requests in a short period of time, as this can reduce your creditworthiness. And a bad credit rating can lead to a loan rejection or you have to pay higher interest rates.
Therefore, it is advisable to only submit a loan request or application if you really want to take out a loan. If you only want to inquire about the conditions, please make this clear to the bank. This is how you ensure that the bank reports a condition request to Credit Bureau instead of a loan request.
What is the difference between a credit request and a condition request?
If it passes on a condition request, the lending bank receives the same information from Credit Bureau as with a loan request. The advantage for you as a customer is that it has a non-binding character and therefore no negative effects on your creditworthiness. Every condition request is also saved in your files at Credit Bureau for 1 year, but it is not visible to third parties. Unlike the loan request, it is therefore Credit Bureau-neutral.
Characteristics of a credit request and a condition request
At Credit Bureau, banks have two options for checking the requirements of a borrower:
- binding request for a specific loan
- can be rejected
- may have a negative impact on creditworthiness
- Saved for 1 year
- 10 days visible to other banks
- non-binding query of the conditions of a bank
- cannot be rejected
- become Credit Bureau neutral
- Saved for 1 year
- only visible to you
To take advantage of a condition request, you can use our credit comparison online. The offers that you can have sent from here only result in condition requests from Credit Bureau at the participating banks and have no influence on your Credit Bureau score. Only when you have decided on a specific offer and sign a loan agreement with the bank will the final credit check be carried out free of charge with a credit request.
How to bypass the credit request with our credit comparison
With our installment loan comparison, you can easily and with little effort get an overview of the loan offers that best suit your financial situation.
- To do this, you only have to enter the required loan amount, the desired term and the purpose in the input mask.
- You will then be shown a list of loan providers – the offers with the best interest rates are at the top.
- Now you can take a closer look at several offers, compare the conditions and take out your desired loan.
A Credit Bureau-relevant credit request only comes at the very end of the process.
Tips for loan requests and loan applications
To help you avoid the disadvantages of a loan request, we have put together a few tips for you.
Find out about your creditworthiness
Get regular self-disclosure from major credit bureaus like Credit Bureau. You have the right to view your data once a year free of charge and to have incorrect entries corrected. This gives you a good overview of your credit rating.
Insist on a condition request
If you have a personal conversation with your bank advisor or with a credit broker, ask him expressly to make the request to Credit Bureau as a condition request. This way you avoid the disadvantages of a loan request.
Be careful about loans without Credit Bureau
A credit request without Credit Bureau information is possible. Then a loan is granted without a previous credit check. A loan without Credit Bureau is interesting for borrowers who would probably not get a loan because of a poor credit rating. But be careful: on the one hand, these loans are associated with extremely high interest rates, and on the other, there are also dubious providers in this field.
How does the bank check my credit rating?
Every bank tries to get an accurate picture of the borrower before granting a loan. The Credit Bureau score plays a central role in assessing creditworthiness. It summarizes the creditworthiness at a glance on a scale from 0 to 100. Several criteria are used for this score.
- The focus is on your previous payment behavior. This includes your reliability in repaying other loans and paying bills on time.
- The entry in the debtor register and opened insolvency and dunning proceedings also have a negative impact.
- Your place of residence also plays a role in assessing your creditworthiness. If you live in an expensive area, it is concluded that you have a high income. Your credit rating increases. On the other hand, if you live in a socially strained region, this can have a negative effect on lending.
- It is positive if you have been living in the same place of residence for a long time. In an emergency, your creditors will make it easier for you to find them.
In addition, you must give banks an insight into other areas relevant to the loan request. These are
- Your income
- other commitments such as current loans
- regular expenses, e.g. B. for rent
Frequently asked questions about the subject of loan requests and loan applications
Some questions are asked again and again when it comes to credit inquiries and Credit Bureau. We have summarized especially common ones for you.
How long does a loan request take?
It can take 4 to 8 days from submitting the loan application to paying out the money. However, this is only a guideline, since the procedure is faster for some banks and slower for other banks. The rule of thumb applies: the lower the sum, the shorter the procedure, the faster the loan is paid out.
It is important that all necessary documents have been submitted in full. Because possible inquiries about missing documents delay the process. Some online banks also offer the option of taking out a lightning or instant loan. In these cases, the loan amount is paid out within 24 hours.
How long does a credit request stay in Credit Bureau?
A credit request is saved at Credit Bureau for 1 year. It is visible to third parties for the first 10 days. A condition request is saved for 1 year, but cannot be seen by others.
What documents do I need for a loan request?
The documents are essentially evidence of your financial circumstances. For most loan applications, you must therefore submit:
- Proof of income
- employment contract
- Account statements from the past 3 months
- Tax notice (often for self-employed)
- Information about existing loans or other commitments
- Information about possible collateral (e.g. real estate)
- ID card (possibly a copy)
- Identification of online applications using the Postident procedure or online procedure
You do not have to worry about proof of creditworthiness, the bank will get it from Credit Bureau.
Will my employer be contacted for a loan request?
No, it doesn’t happen. You prove your regular income with documents such as pay slips, bank statements or the employment contract. Your employer will not be aware of this.