What is Creditworthiness?

Creditworthiness is the basis of economic activity, because creditworthiness means, in short, solvency . In this article, we have summarized for you what you need to know about credit checks, SCHUFA scores and creditworthiness for the self-employed.


Anyone who can make all due payments on time and in full is liquid, solvent and has thus fundamentally ensured their own creditworthiness. Credit scorings or credit ratings are created by credit institutions on the basis of numerous influencing factors. These show how solvency is assessed and thus have a direct influence on the granting of loans.

When assessing creditworthiness for the purpose of lending, banks combine personal creditworthiness and economic creditworthiness . The focus of personal creditworthiness is on whether the person concerned is reliable and willing to repay the loan. The economic creditworthiness, on the other hand, is based on the examination of the ability to make the necessary payments.

Credit check

This brings us to the credit check , which is particularly important for founders, but often also for entrepreneurs in later phases of business activity.

Credit check – background

Why is a credit check carried out at all? Anyone who collects extensive documents for banks in order to get a loan can well ask themselves this question. The reason is simple:

According to wholevehicles, the most comprehensive possible check of solvency serves the credit institutions as a basis for decision-making as to whether or not a loan is granted and, if so, under which conditions this loan is offered. At the same time, the test is also a certain protection for consumers, because banks also recognize who, for example, should not take out further credit due to existing liabilities , otherwise there is a risk of over-indebtedness.

Personal and economic creditworthiness

What exactly is being checked now? The basis is personal data, which is also included in the scoring. These include, for example, age and place of residence. The focus of the test is on personal and economic creditworthiness, which we will now go into in more detail.

Personal creditworthiness

In the personal credit it goes directly to the respective person and their behavior. This assesses whether someone is fundamentally trustworthy and the credit institution can assume that the person checked is willing to meet all payment obligations.

Personal creditworthiness is primarily determined using historical data. The main thing is whether you have already taken out loans and repaid them in a timely manner, whether there are other obligations and whether there is a negative Schufa entry. Ultimately, an overall picture should be created that shows whether the person tested is suitable as a personality, based on previous behavior, to take out a loan.

Economic creditworthiness

When checking economic creditworthiness, the focus is now on hard facts and figures and less on willpower and personal behavior. This part of the exam is therefore future-oriented, while the personal exam is more based on the past.

When checking the economic creditworthiness, banks obtain information about the income situation and current expenses (household accounts). Accordingly, these documents should be readily available and structured. In this way, credit institutions can understand what monthly amount can be paid for repayments and interest.

The results of the two parts of the examination are then combined into a scoring . The determined evaluation, similar to an evaluation of stock corporations by rating agencies, is then the basis for the further course of action of the bank.

Execution of credit checks

With regard to the implementation of credit checks, two central questions arise: Who requires a credit check and who is allowed to carry it out?
In principle, a credit check can always be carried out if there is a legitimate interest. An example of this is when you want to take out a loan and your bank wants to get an overview of your situation in advance.

Another possibility are so-called Schufa clauses. This means that you voluntarily agree that a credit check may be carried out. This procedure is often the case for larger online orders or mobile phone contracts. The credit check will usually start from the companies you want to work with or whose customers you want to become, regardless of whether it is a bank, a mobile phone provider or your future landlord.

For the specific implementation of the credit check, data collected by credit agencies is accessed. Probably the best-known company in this industry is Schufa Holding AG, although there are also other providers. With the Schufa information, personal circumstances are already taken into account – for example, what employment relationship the person is in, which can have negative effects, especially for founders. Additional entries that can be made can improve the extract. In order to optimize your own creditworthiness, especially as an entrepreneur, additional securities can be provided, such as liability declarations and guarantees.

Credit index and Schufa score

A wide variety of factors, which have already been described above, flow into the Schufa score. The aim is to objectively map which payment behavior a person has shown so far. The result is a simple rating that is intended to classify the probability of a payment default.

The creditworthiness index is just as well known and common . This determines a comparable result and transparently shows which creditworthiness is given or how great the risk is for the lender. In the case of companies, in addition to annual financial statements , industry key figures are included in the creditworthiness index in order to provide a holistic picture.

The creditworthiness index classifies (potential) debtors into different classes, with a specific value for the probability of default being given. One can speak of a good credit rating from a value below 250 . All results over 300 are already to be viewed critically and associated with a significantly higher probability of failure.

Creditworthiness after the company was founded

The self-employed in particular often have difficulties with the rating of their creditworthiness. After a company has been founded, there is sometimes only a small amount of own funds available and at the same time there is still no historical data that goes far back to prove the success of the company. These factors typically lead to a comparatively poor rating for solvency. No matter whether for the company itself or for founders.

In order to improve the credit rating, it is possible to bring in additional collateral . This can be real estate, for example, but also personal liability declarations and guarantees from other people who agree to be liable for any payments that are not made if the worst comes to the worst. Before such steps are taken, however, the self-employed must always weigh up the personal risk they want to take. If a loan is absolutely necessary, everything apart from this additional collateral should be optimized for the loan request. Documents must be readily available and structured financial plans, good demeanor and previous professional experience can positively influence banks in their credit decision.

If you need a loan as an entrepreneur, you should accordingly start developing comprehensive, detailed documents and solid plans in good time to strengthen your position and leave a positive impression on potential lenders, even if your creditworthiness is not ideal based purely on numbers .