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Credit Checks and Credit Scores for Leasing in Switzerland
You want to lease a car in Switzerland? Smart choice! But before getting behind the wheel, your leasing company of choice will conduct a credit check based on your credit score. You can imagine the credit score as your financial reputation. It serves the financial institutions to understand whether you can actually afford the lease.
Whether you’ve heard the terms "credit score” and "credit check” tossed around or this is all new to you, this guide will walk you through everything you need to know. By the end of this article, you'll have a clear understanding of what these terms mean, why they’re important, and how they affect your chances of getting that car lease.
- What Is a Credit Score in Switzerland?
- Who Checks My Credit Score?
- What Happens During the Credit Check?
- Why Is a Credit Check Necessary When Leasing a Car in Switzerland?
- How Can I Ensure My Credit Score Improves?
- Can I Check My Own Credit Score?
- Conclusion
What Is a Credit Score in Switzerland?
A credit score in Switzerland is a number that reflects your creditworthiness. This determines how likely you are to be able to carry and pay back a loan or meet the terms of a lease. The better your credit history—meaning the more consistently you pay your bills on time—the higher your score.
Your credit score is calculated using data from various sources, including your credit history, information from credit databases like ZEK (Zentralstelle für Kreditinformation) and CRIF, and even some personal details like your employment status and whether you have dependents.
While the exact formula that financial institutions use to calculate your score is a well-kept secret and may differ depending on the institution, the factors that influence it are mostly rather consistent.
These factors include, but are not limited to
- Were you able to pay your past loans?
- How did you manage debt in the past?
- Do you pay your bills on time (even a missed Galaxus payment can make a difference)?
- Do you have any entries in the debt enforcement register (Betreibungsregister)?
- Are you generally financially reliable?
Who Checks My Credit Score?
When you apply for a car lease in Switzerland, the leasing company or leasing bank will perform a credit check to assess your creditworthiness.
In most cases, they do this with the help of specialized credit agencies such as CRIF, ZEK, and Intrum. Together with these institutions, they gain a detailed overview of your financial history.
| Term | Description |
|---|---|
| ZEK | The ZEK (Central Office for Credit Information) records creditworthiness information from credit transactions in Switzerland for both individuals and legal entities. |
| CRIF | A credit reporting agency in Switzerland that provides credit-relevant information about individuals and businesses. Individuals can also obtain self-reports here. |
| Intrum | A European debt collection agency offering debt management and payment services for creditors. gowago.ch collaborates with Intrum for the online signature process. |
What Happens During the Credit Check?
The credit check is essentially a background check of your finances. The leasing company will request your financial records from agencies like ZEK and CRIF to see how well you’ve managed credit in the past.
So when you send in a leasing application, you will be asked to provide personal information. Among this is the amount of salary you receive, what your fixed spendings are (such as rent and other loans), whether you have children, and other running costs. This is used to preliminarily calculate whether you can actually afford the car in question.
If you want to find out what your budget for a leasing is before beginning the search for your next car, you can use the Gowago Budget Calculator. This will also give you some insight into which factors are central to calculating your acceptance for a leasing.
After collecting your personal information, your advisor at the leasing company will begin the credit check process. Depending on your case, this process takes anywhere between 1-5 business days.
If your budget is high enough and your credit history is in the green, the credit check can be done within a day. However, if you need to provide more proof about your financial situation, or you have open bills that need to be paid, the process will take longer. Only few cases exceed five days.
After the credit check gives the all clear, you are all set to continue your application, sign the contract, and get into your new car!
Why Is a Credit Check Necessary When Leasing a Car in Switzerland?
This process is primarily there to protect you, the consumer, from slipping into over-indebtedness. Swiss consumer protection laws (Konsumentenschutz) are strict about preventing situations in which consumers go so far into debt that it becomes hard to get out of again.
This means that it’s illegal for a leasing company or credit institution to give you any kind credit or leases that could push you into financial trouble. By conducting a thorough credit check, the leasing company ensures that taking on a new lease won’t lead you into debt you can’t handle.
As Article 3, Paragraph 1 of the UWG states: "It’s prohibited to grand credit that leads to the over-indebtedness of the consumer.”
Naturally, it is also a way for the bank or leasing company to assess risk. Leasing a car is a kind of loan—the leasing company is giving you a car with the expectation that you’ll pay for its use over time. Apart from protecting you from creating financial issues for yourself, they are also protecting themselves from losing assets.
If you would like to receive some insight on whether you can afford the car you are currently eyeing on gowago.ch, you can check out the Gowago affordability calculator!
Gowago Affordability Calculator
If your credit score is high, it shows that you’ve been responsible with your finances in the past, making it more likely that you’ll keep up with your lease payments. On the flip side, if your score is low, the leasing company might see you as a higher risk. This could lead to your application being denied, or they might offer you the lease with higher interest rates or a larger down payment to offset the risk.
How Can I Ensure My Credit Score Improves?
If your credit score isn’t where you want it to be, don’t worry—you can take steps to improve it. First, make sure all your bills are paid on time. Late payments are one of the quickest ways to drag your score down. If you have any outstanding debts, try to pay them off as soon as possible, especially if they’ve led to entries in the debt enforcement register (Betreibungsregister).
If you would like to learn more about how to remove entries in the debt enforcement register, you’re in luck. We have prepared a handy blog article explaining all the necessary steps.
It’s also a good idea to regularly check your credit report for any errors. Mistakes happen, and an incorrect entry could unfairly damage your score. If you spot something that doesn’t look right, have it corrected. Lastly, avoid making multiple credit applications in a short period. Each credit check can slightly lower your score, so it’s better to space them out.
Can I Check My Own Credit Score?
This is quite easy to do. In fact, checking your own credit score is a smart move before applying for a lease. In Switzerland, you can request a self-credit-check from trusted institutions like CRIF and ZEK. This allows you to see where you stand and gives you a chance to address any issues before a leasing company runs their check.
When you request a self-credit-check, make sure you provide accurate information to get the most precise report. Some agencies offer this service for free, while others might charge a fee. Keep in mind, though, that it’s best not to request multiple credit checks from different agencies within a short timeframe, as this can negatively impact your score.
Conclusion
Understanding credit scores and credit checks can be somewhat confusing, but it’s essential if you’re thinking about leasing a car in Switzerland. Your credit score is a key factor that leasing companies consider when deciding whether to approve your application, so it’s worth taking the time to understand how it works and what you can do to improve it.
By keeping track of your financial habits, ensuring timely payments, and checking your credit report for errors, you can boost your creditworthiness and increase your chances of securing that car lease.
