In its file, Credit Bureau not only enters reports of financial misconduct, but also information about every borrowing and telecommunication contracts. Colloquially, consumers only refer to registered negative characteristics as Credit Bureau entries.
A guarantor is liable to the financial institution for the repayment of a loan if the actual borrower cannot make it. However, private guarantees involve risks for a bank, because in some cases legislators consider them to be immoral. For this classification, it is sufficient that the guarantor takes over financially and the bank was able to recognize this fact. Borrowing is often possible even with a Credit Bureau entry without a guarantor.
The Credit Bureau entry does not completely exclude a loan
While direct banks often actually view every negative feature as a reason for excluding the loan, traditional banks in some cases grant a loan despite Credit Bureau entry without a guarantor. The prerequisite is that the Credit Bureau entry was forfeited some time ago and that it is a soft negative feature. Ideally, the loan applicant can prove that his financial circumstances have changed significantly since the Credit Bureau entry was forfeited.
Many consumers forfeit a Credit Bureau negative feature during a period of unemployment and live in secure financial conditions after starting work again. In this case, the house bank is a suitable point of contact for a loan despite Credit Bureau entry without guarantor, since it can easily check the applicant’s improved economic situation based on the account management.
Alternative ways of borrowing with Credit Bureau entry
Several soft negative features as well as a hard or a fresh soft negative entry often lead to the fact that all German financial institutions do not grant a loan despite Credit Bureau entry without guarantor. In this case, it is advisable to use Credit Bureau-free loan options. The classic form of a loan without Credit Bureau is the pawnshop loan. The pawnbroker receives a pledge as security for the lending and therefore does not require any information from Credit Bureau.
Less well known is the possibility of loaning an existing life insurance contract or private pension insurance. In this case, the insurer pays out the desired loan and waives the demand for credit protection, since its customer is liable for the repayment of the loan with his own assets. However, borrowing from mortgaging life insurance or pension insurance does not make sense for government-sponsored contracts because the government reclaims the allowances granted.
Another alternative for a loan despite Credit Bureau entry without guarantor is borrowing in Switzerland. The banks based there are not Credit Bureau contracting parties and therefore do not receive any information about any negative entries that may exist. However, they require a higher minimum income than most German credit institutions and, with a few exceptions, limit lending to 3500 USD.