Whichever bank you go to for a personal credit application, it will always end up establishing a score against your situation. What is scoring? What impact when applying for personal credit? How to evaluate your scoring? Discover our full explanations.
What is scoring?
Scoring, when talking about personal credit, is simply a note that will be assigned to you when applying for credit. Very often, the bank or the financial institute does not communicate the scoring directly to the client: this value is only used internally to decide whether or not to grant the personal loan and, if applicable, the conditions offered. Scoring is often calculated automatically. If the score is too low, the bank will simply refuse the personal credit to the applicant.
The elements taken into account
The method of calculating the scoring varies from one bank to another, but will in any case take the following elements, in order of importance:
- Your income: a high income will imply better chances of granting personal credit, and better loan conditions.
- Your expenses: in order to be able to calculate your expenses, the banks request a certain amount of information such as the rent paid, the annuities to be paid, the number of dependent children and their age, your marital status, municipality of residence, etc.
- Your situation: your age, your marital status, your nationality (and type of permit), all these elements are taken into account when calculating the scoring. Thus, people under 25 will be less likely to get a credit, as will those with a permit, or any work permit for a short time.
- Your predecessors: in Switzerland, all credit requests and payment histories are registered with the ZEK, an organization that banks can easily consult to find information about you in order to study any request for personal credit.
The human factor
The establishment of a scoring represents a certain advantage for the loan banks: automation of the requests, equalization of the chances whatever the person handling the file, improvement of the speed of treatment. However, the human factor is then left out. In some cases, it may happen that your credit request is refused following too low a score even when you have elements in your favor allowing the request to be accepted: additional income, rent paid by the employer. For this reason, it is best to contact an experienced broker. The latter, at no additional cost, will be able to defend your file with the banks at no additional cost and ensure you better chances of granting personal credit, or even amore advantageous interest rate.