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Loans & mortgagesPersonal loansZEK Central Office for Credit Information
Why the ZEK is so important for lending

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

The Central Office for Credit Information (ZEK) is an organization that brings together service providers in the loan, lease and credit card industry. Its aim is to enable these service providers to exchange information with each other. The Information Centre for Consumer Credit (IKO), on the other hand, records the data of loans and leases pertaining to private individuals in accordance with the Consumer Credit Act. Comparis explains what this means in practice for your loan or lease application.

Overview:

Role of the ZEK

In Switzerland, the Central Office for Credit Information (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:

  • Records the credit obligations and credit history of borrowers, lessees and credit card owners
  • Records 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.

What is the difference between the ZEK and the IKO?

In 2002, following the revision of the Consumer Credit Act, a separate body was created – the Information Centre for Consumer Credit (IKO). This requires providers of loans and leases to record the loan and lease activities of private individuals.

Directly linked to the Consumer Credit Act, the IKO is designed to protect borrowers and lessees from falling into excessive debt.

At the time of the revision, the work of the ZEK already covered the main tasks of the IKO and often much more besides. It was therefore agreed by law that the IKO would cooperate with the ZEK on a voluntary basis. Since then, the databases have been managed separately. The two organizations are separate legal entities, each having its own executive board.

Differences and similarities at a glance:

IKOZEK
Personal data: Last name, first name, date of birth, address
Credit types: Last name, first name, date of birth, address
Rental agreements: Hire purchase, leases
Credit and store cards: Payment delays, credit card debt
Meets the requirements of the Consumer Credit ActMeets the information requirements of the lender
Data on current loans, leases and credit cards onlyAlso includes enquiries and rejections
Data on consumer loans subject to the Consumer Credit Act onlyAlso includes data on loans and leases not subject to the Consumer Credit Act (e.g. loans over 80,000 francs and the obligations of legal entities)
Includes credit information relating to credit cards
Information from other official sources (e.g. bankruptcy, inheritance, guardianship, legal aid)

What information is available from the ZEK?

The ZEK manages records that provide data on the following:

  • Open credit applications
  • Rejected credit applications
  • Current agreements
  • Terminated agreements
  • Information from other official sources
  • Card information
  • Information on contracting parties
  • Voluntary card blocks by request of the holder
  • Code 178: change of keeper prohibited (pertains mainly to leases and car loans)

Records may also include the following details, depending on the type of transaction:

  • Credit obligations
  • Contingent liabilities
  • Payment methods
  • Any collateral
  • Any credit standing information (as a code)
  • Information from other official sources
  • Rejected credit card applications
  • Blocked cards
  • Problems with contracting parties
  • Entry of code 178: change of keeper prohibited

The information that must be supplied to the ZEK is listed in the ZEK regulations.

What are lenders obliged to report to the ZEK?

General:

  • Rejected applications including the reason
  • Blocked credit cards: within 2 days, including the reason
  • Within 10 days of payout at the latest: agreements (stating total amount) as well as card and overdraft balances
  • Payment delays and debt collection procedures, within 1 month, including debt settlement agreements
  • Terminated loan and lease agreements, including code
  • Loan renewals and refinancing
  • Overdrafts and payday loans: quarterly balance

Serious delinquencies during the term of the agreement:

  • Summons to pay
  • Out-of-court restructuring
  • Debt rescheduling
  • Breaches of trust

Good to know: The ZEK automatically informs creditors of any delinquencies relating to their current agreements.

The following events are also automatically reported to the affected members:

  • Information from other official sources relating to a current agreement or open credit application
  • Blocked cards relating to a current agreement or open credit application
  • Credit application to another provider during an open credit application within 30 days
  • Credit application to another provider when a current agreement is in place and less than 30 days old

Note: since open credit applications are also recorded at the ZEK, lenders can see whether a customer has open credit applications and how many. Since lenders tend to view multiple applications negatively, this could reduce the chance of an application being approved.

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 (internal guidelines, for instance) than a standard reason, 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.

Want to find out approximately how much you could borrow?

Check loan affordability

However, multiple rejected credit applications will have a negative effect on the risk assessment: if a lender notices you have received multiple rejections from other lenders, it is in their own interests to look more closely at your application. 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.

Is there a reason to «fear» the ZEK?

Contrary to popular opinion, the ZEK is not responsible for an application being rejected, nor does its database contain 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.

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. Don't enter into any agreements via such websites as there are usually – potentially fraudulent – debt consolidation companies behind them.

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 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.

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.
  • How to proceed: 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 data (in German and French only).

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

Both the IKO and the ZEK 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 an IKO extract

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

    (in German and French only)

More information:

Are you looking for a loan?

Credaris, a partner service of comparis.ch, can help – free of charge and with no obligation. For all matters relating to lending, borrowing, credit reports and the ZEK – Credaris provides the expertise you need.
Find the best deal

Approval of a loan is forbidden by law if it would lead to over-indebtedness (Art. 3 UWG).

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