WHAT YOU NEED TO KNOW ABOUT CREDIT WITHOUT SCHUFA EXPERIENCE?

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Those people, who are living in Germany, are well aware that most of the services here are regulated by the fixed-term contracts. For example, even if you need to have telephone connectivity, you have to agree upon either 3 months or 6 months contract or can be more than that. As long as people agree on the contracts, they can avail particular services.

At the same time, it is always suggested to be careful while signing such contracts, especially you should read all the terms and conditions involved. Any misinformation or incorrect decision can put bad impact on you and your creditworthiness.

When it comes to the creditworthiness, it becomes more important when you are going to apply for the loans. The lending companies do analyse the risk factors of the particular borrower and then finalise whether to fund him or not.

Such information is very crucial to know especially to those individuals, who are going to apply for credit without Schufa experience.

What is Schufa is all about?

Schufa can generally be defined as the protection company for general creditworthiness. Its German explanation is Schutzgemeinschaft für Allgemeine Kreditsicherung. The concerned authority used to keep the record and calculate the credit facts of a particular person and analyse his or her creditworthiness accordingly. The main job of the agency is to protect the clients from certain credit risks and to save them from any bankruptcy.

The deciding factors that define the Schufa score are:

  • Personal details like date of birth, name and residential address
  • Current mobile phone numbers and any contracts
  • Guarantees if someone has taken
  • Bank account details, credit card and loans availed
  • Any bankruptcy charges due to non-payment

Apart from these factors, the company also like to keep an eye on how much times you have changed your residential address, constant borrowing of loans, and numbers of credit cards or credit-related inquiries.

How you can come to know a better or bad Schufa Score?

Since you do not have Schufa experience but you want to avail the credit, it is very important for you to know that classification of Schufa scores. Here it is:

SCORE CLASSIFICATION POSSIBILITY OF CREDIT
Above 97.5% Very Good Schufa Score Every chance of getting loan
95% – 97.5% Good Score A good chance of applying loan
90% – 95% Fair Score You are a risky borrower
80% – 90% Bad Schufa Score Difficult to Avail a Loan
50% – 80% Very Poor Score Very high risk involved
Below 50% Critical Score Not probably eligible for loan

How Can You Improve Your Credit Chances without Schufa?

It would be very difficult to get credit without Schufa score, whether you are applying from mainstream lending or modern-day lenders. However, there are some private lenders in Germany providing credit without Schufa and with not much in terms of obligations. But they are very few and you have to take out some time to find them online.

Meanwhile, here are some few tips through which you can improve your score:

  • Try to reduce your pending debts as much as possible before going to apply for any credit
  • Don’t opt for taking too many loans because that can put a negative impact on your credit profile
  • Make your bill payment and other instalments on time, as this will impress the lender
  • If you have multiple credit cards, then close few of them that are not in use
  • Cross-check for any error existing in your financial report and correct it as soon as possible

Thus, availing credit without Schufa experience is quite a risk. This guide will make you understand at least the basics of it and will help you to make the right decision later.

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