Credit refusal: what to do?

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Reasons for refusal

There are many possibilities leading to a loan refusal. Those are generally linked to the situation of the applicant, or it’s background. More specifically, the main reasons for a rejection are:

  • Budget: banks must study the budget of every applicant. Indeed, lending a loan is forbidden if it leads to over-indebtedness of the consumer (Art. 3 of Swiss LCD).
  • History: in Switzerland, every request is recorder to a single central: the ZEK. Thus, it is possible to check the background of every requester. A negative entry in the ZEK can lead to a refusal.
  • Financial prosecution: globally, it is not possible to make a loan with financial problems, including financial prosecutions.
  • Work permit: foreigners working in Switzerland mut be employeed for a certain amount of time with the same employer. The period is 3 months with a C permit, 6 months with a B permit, and 3 to 4 years with a G permit. Also, a credit is a L permit is overall not possible.
  • Income: in order to obtain a credit, one should be either working in Switzerland for 3 months minimum, or be an independent for a least 2 years.

Wait at least 3 to 6 months

As stated above, every request is usually recorded to the ZEK. Therefore, someone making too many loan demands could be blocked for the current and future requests. The best practice is to limit the number of applications. It is also good to know that in case of rejection from an agency, the chances to get an acceptation with another agency is really low. For that reason, it is better to wait minimum 3 to 6 months before making another request.

For the next request, it is also a good point if you can prove an improvement to your file: lower expenses (insurances, home rent), or higher income (salary, husband/wife ‘s salary). In there is any doubt about your next application, it is also useful to work with a credit broker. So you could explain your situation and get personal advice.

Debt relief: an alternative

In case of financial problems, there are specialized advisors working with debt relief.
Article written by Multicredit Team

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