What is the Swiss Central Office for Credit Information (ZEK)?

1. What is the function of the ZEK?

The Swiss Central Office for Credit Information (ZEK) is an organization that brings together service providers in the loan, lease and credit card industry. In Switzerland, the ZEK functions as a central reporting agency for information relating to the credit history of loan applicants. Founded in 1968, the ZEK is a private organization. Nowadays, it performs the following tasks:

• Recording the credit obligations and credit history of borrowers, lessees and credit card holders

• Recording positive and negative reports relating to loans, leases and credit cards

Legitimate Swiss lenders are members of the ZEK. Their membership obliges them to supply information to the ZEK. For every loan or lease application they receive, they consult the data stored at the ZEK.

This is therefore a key step in the process for checking the creditworthiness of each applicant (credit check). Lenders also send reports to the ZEK during the term of a loan agreement. The ZEK therefore helps lenders assess the credit risk of potential borrowers as well as the affordability of a loan application based on ongoing obligations.

Good to know: ZEK data is also consulted for various other banking services such as mortgages, Lombard loans and overdrafts.

2. How do ZEK entries affect a loan application?

It is important to distinguish between neutral and negative ZEK entries:

Neutral:

• Open credit application: visible as long as valid

• Current credit agreement: visible until end of agreement

Potentially negative:

• Rejections (visible for 2 years)

Lenders are obliged to provide a reason for rejecting an application. As this is often something other than a standard reason (internal guidelines, for instance), code 99 – rejected without reason – is most commonly used.

Rejected credit applications will not necessarily affect your chances of being approved for a loan in the future. For example, if an application is rejected because the amount is too high, this is not considered a negative event in terms of your credit standing.

Note that having several rejected credit applications has a negative effect on the risk assessment: it is in a lender's own interests to look more closely at applicants who have been rejected by several other lenders. Rejections remain visible for two years.

• Declined offers (visible for 6 months)

If you decline a loan offer, this is also recorded. It is not clear exactly how declining an offer impacts your future chances of approval. However, it could potentially mean that you have created unnecessary work for a lender and are therefore less attractive as a borrower.

3. Should I worry about the ZEK?

The ZEK is not responsible for rejecting applications. It is also not a database containing only negative records.

Much of the data is purely administrative or informative in nature, and details of positive payment behaviour are also reported to the ZEK. This is advantageous for customers: if a lender has had a good experience with a borrower, other lenders will be able to see this too.

In addition, professional and thorough checks on applicants ensure that no excessive obligations are approved and that borrowers and lessees therefore do not become over-indebted. As a result, Switzerland has a low default rate of 1-2%, which helps to keep loan deals affordable.

4. Is it possible to get a loan without the ZEK?

All legitimate lenders in Switzerland are members of the ZEK. Nevertheless, you can still find some less reputable websites that advertise loans without a ZEK credit check. Do not enter into any agreements via these websites. There are usually unreliable or even potentially fraudulent debt consolidation companies behind them. Read more in the article about getting a loan without a ZEK entry.

5. The main credit report codes applicable during the term of the agreement

Entries indicating poor payment practices or even defaults on loans, leases and credit cards inevitably mean you will be offered less attractive rates, or will in many cases be rejected.

Code meanings:

• 03: Slow payments / often with payment reminders

• 04: Special measures and payment delays

• This usually results in subsequent applications being rejected immediately (depending on how long ago the entry was recorded and whether the borrower can provide proof of financial stability, a loan may still be possible with some lenders)

• 05: Partial/total loss (results in subsequent applications being rejected immediately)

• But also: regular payments

Reports relating to credit cards are also included in the risk assessment:

• If a card is blocked, this remains visible for 5 years.

• If debt collection measures are in process or a lender has to write off credit card debt (partial/total loss), this remains visible for 5 years and makes it impossible to take out a loan.

6. Can I arrange for a ZEK entry to be removed?

• Correct records are held in the database in accordance with official retention periods. They cannot be removed before the end of the applicable period.

• Incorrect records must be removed by the party responsible for creating them.

• Procedure: request the information, then provide the reporting party with proof that the record is incorrect and should therefore be corrected by the ZEK.

Learn more about deleting incorrect ZEK data here (in German and French only).

7. ZEK extract: your right to see personal information stored about you

Both the ZEK and the IKO respect your right to see the personal information they store about you. This means that you can request an extract free of charge at any time. However, this will not include the reasons for any rejected loan applications.

• Request a ZEK extract (in German and French only)

• Request an IKO extract (in German and French only)