A loan is requested and this is rejected. Many loan seekers fall out of the clouds and ask themselves what the loan approval failed. When asked why a loan was rejected, the loan seeker should generally know that there is freedom of contract in Germany. This means that nobody has a special right to a loan, every bank is entitled to refuse a loan. The rejecting bank usually communicates the decision verbally or in writing. There are always factual reasons why a loan refused was not possible despite a positive Credit Bureau.
The loan declined despite positive Credit Bureau – the reasons
Those who know the reasons can remedy the situation and submit the loan application again. This can be with the same bank, but it is often better to switch banks. The customer should know that a non-binding credit check by the bank is important. If the loan is rejected again, this rejection will not be reported to Credit Bureau. Every registered loan refusal weakens the credit rating.
Should the loan seeker know, if a loan is rejected despite positive Credit Bureau, it is not always the Credit Bureau that is the reason for the rejection. The bank’s assessment of whether the loan can be repaid is made up of various areas. This includes, for example, a permanent position. However, if the employment contract is limited or includes a trial period, no credit will be concluded. Because neither the bank nor the loan seeker know how to proceed after a time limit or a trial period. If the employment contract is extended, the customer is taken over or unemployment is brought in.
This is too insecure for the bank and therefore the loan is rejected despite a positive Credit Bureau, but it is not the permanent contract that plays a decisive role in the loan approval, but also the income. The income must be so high that it is above the garnishment exemption limit and shows a garnishable portion. An example: A single person must earn about 1,160 USD net in order to receive a corresponding loan. In most cases, all income below this is only granted with credit protection.
The budget that all banks draw up before a loan approval is very important for a loan application. The budget must provide financial leeway, which is the guarantee that the customer can pay the installment. Most of the loan declines can be explained with these conditions. Then there is the Credit Bureau score, which nobody can really influence.
The Credit Bureau score is calculated from all the entries available to Credit Bureau, both positive and negative. For this, a mathematical-scientific method is used, which gives the Credit Bureau score. The score also counts as a probability value and is between zero and one hundred. This score reflects the likelihood that a loan will be paid. The higher the score, the higher the credit rating.
The solution to the loan rejected despite positive Credit Bureau
The least influence can be exerted on the employment contract and income. But the customer can work on the household bill so that it gives a better picture. If the financial scope was measured to be too small, the customer can implement possible savings measures. Think of insurance that could possibly be canceled or at least cheap contracts could be concluded. The mobile phone contract, perhaps several, could also be influenced. Maybe cancel one or the other contract or conclude a cheaper one.
But membership fees that you may still be paying, even though you haven’t been to the club for a long time. Another common reason when a loan is rejected despite a positive Credit Bureau is the account. If it is in the red, there have already been direct debits due to insufficient funds, payments to collection agencies and generally a steady deterioration in the account balance, all of which are negative features for the bank. These figures clearly prove that the customer cannot get by with his income, let alone pay an installment.
If a loan is rejected despite a positive Credit Bureau, but no negative features have been identified or they have been eliminated, another bank can often be the solution. There are significant differences in the terms of a loan. A loan can often be refused if the bank has offered a very cheap interest rate. Because in such a case she will check very carefully.
An overdrawn overdraft facility can also result in the loan being rejected. Especially when the credit line granted is always exceeded. The overdraft facility is not only an expensive loan, but also a loan that is quickly available and can be used quickly, which leads many customers to use it far beyond the credit line. If there are urgent bills to be paid or standing orders are pending, the bank does not transfer anything because the account is not funded, which also leads to a loan rejected despite positive credit, which clearly shows that the customer does not pay any installments can pay.
Seek professional help
If the customer is concerned that the loan will be rejected again, he can seek professional help. With a credit intermediary, the credit opportunities can increase. Because intermediaries check in advance what it looks like with a loan. A further rejection will at least not worsen the credit rating. There are reputable and reputable credit agencies that are investigating the problem closely. Afterwards, solutions are presented to the customer.
Here it would be possible to apply for a Credit Bureau-free loan. Most of the money comes from Switzerland or Liechtenstein. But these banks also require strict requirements for credit approval. For example, the employment contract must be unlimited and the income must be sufficiently high; it must show an attachable share, as mentioned above. Credit Bureau is not an issue for these loans, and the loan is not entered.
But a loan from Germany would also be conceivable, because credit agencies in particular know banks that do not make large advertisements and also approve loans for customers if, for example, the income is not so high. However, other credit safeguards are required here. Think of a second borrower or a guarantor. These people would have to continue paying the loan if the borrower defaulted.