What is a credit score and why is it important when getting a lease?
In Switzerland, the credit score plays a central role in applications for leasing or any form of credit. It is a numerical figure that helps banks and financial institutions estimate a person’s creditworthiness.
This score is calculated based on a variety of factors, including information from credit databases and aspects of the customer’s personal life, influencing their ability to secure a loan. A higher credit score enhances the chances of loan approval, as it signifies a lower risk to lenders. Swiss financial institutions are selective in approving credit applications, often declining or imposing risk mitigation tactics such as higher interest rates or higher down payments on applicants deemed risky.
The calculation of a credit score remains a secret among financial institutions, with no standard formula disclosed to the public. Factors influencing in your credit score vary by lender and may result in different scores from each institution, details of which are not typically shared with applicants.
Key elements include:
- the person’s credit history in databases, which track your bill payments
- entries in the debt collection registry (Betreibungsregister)
- entries in the Zentralstelle für Kreditinformationen (ZEK), detailing the person’s past debts and credit applications.
- Employment data concerning the person’s current employment status and past employments
- Other personal information, such as marital status or whether if somebody has children
It's crucial for customers to ensure they meet all loan requirements before applying, as indiscriminate and rejected applications can negatively impact their score.
There are multiple ways for consumers to find out their credit-score, but the easiest is to perform a self-credit-check through one of these two trusted institutions:
Both CRIF AG and the ZEK offer the possibility of self-credit-checks. However, it is advised that customers do not perform multiple or repeated credit-checks, since this may impact the credit-score as well.