Financial bottlenecks are not uncommon and nobody is immune from them. The situation becomes difficult when the creditworthiness is already so bad that the house bank does not expand the overdraft facility, terminates it and does not give any further credit. Entries in the Credit Bureau due to ongoing judicial dunning procedures, terminated contracts or the like then complicate the exemption from this situation. With a little research, however, you can find a way out.
Function of the Credit Bureau
The Protection Association for General Loan Assurance (Credit Bureau) is an interest group of the banking industry and other service providers who use the data and information about natural persons collected there to determine score values for the credit default risk. It is not just the data collected by the banks that flow, such as As to payment behavior, credit cancellations, credit card cancellations, etc., but also general information, such as the frequency of moving home.
However, since errors can also occur at Credit Bureau, everyone should exercise their right to free information and check the data collected. This option is available once a year and can significantly improve your own score and thus your creditworthiness.
Find alternatives in the market
If, despite all the corrections, the Credit Bureau entries are so negative that the house bank is no longer accommodating, alternatives must be sought. There are loans without Credit Bureau and collateral, which have worse terms than conventional consumer loans, but are also sufficient in difficult financial situations. Of course, the conditions here vary just as with all offers and should therefore be carefully studied in advance.
Any preliminary costs or fees in advance should not be incurred because the processing fees must be included in the annual percentage rate. Offers should be obtained in writing so that the credit costs can also be tracked. Loans without Credit Bureau and collateral are naturally less favorable because the risk of default is simply higher for the lender.
It can also happen that taking out residual debt insurance is mandatory. In this case, however, no separate costs may be shown because the contributions must also be included in the annual percentage rate.
Bad creditworthiness – high interest rates
A precise comparison of the loans without Credit Bureau and collateral can certainly save money, because the offers vary on the market. Additional costs also play a major role. A residual debt insurance can make sense, especially if there is insufficient private insurance coverage, but the premiums are usually substantial.
Your own situation should therefore be analyzed realistically and responsibly, on the one hand to avoid over-indebtedness and on the other hand to ensure repayment of the loan. Loans without Credit Bureau and collateral can then be a lifeline.