What does the SCHUFA do?
The SCHUFA (credit investigation company) is one of the mysterious companies in Germany. Almost everyone has heard of it at some point, but only few know what the SCHUFA exactly does and what it knows.
Who ever wants to visit the Schufa personally has to go to Wiesbaden. Here: logo lettering at the entrance.
It is typical that one finds the name SCHUFA within the small print of lease contracts, instalment purchases, mobile phone contracts or when opening a current account.
With one’s signature, one agrees that data can be retrieved from the SCHUFA and also be forwarded to the SCHUFA.
And this is exactly what the SCHUFA does: it collects information about people and provides this data to interested companies. That is why it is called a credit agency.
The SCHUFA is the largest German credit valuation company
SCHUFA evaluates the creditworthiness
However, the SCHUFA is not interested in all data: for itself and the requesting companies, it is about the creditworthiness of potential customers in order to protect themselves from credit failures. By the way, this concern is the reason for the name SCHUFA, which dates back to the “Schutzgemeinschaft für Absatzfinanzierung” (protective association for sales financing) that was founded in 1927.
Accordingly, the SCHUFA primarily collects data through contracts that are relevant for the payment performance.
Depending on the SCHUFA-estimates on your creditworthiness, this can determine, for example, whether a bank will not open a current account with credit card or how much interest you have to pay for a loan. The higher the risk for the bank, the sparse and more expensive are the benefits for you as a customer.
SCHUFA-data is not free from error
In general, you do not get to know what the SCHUFA says about you to a company. In a perfect world in which everything is completely legitimate, you would not need to worry about this, but the world is not perfect.
People make mistakes. Therefore, it also happens that the SCHUFA has outdated and wrong information and forwards it. If you consider that important financial decisions depend on this information, it can be exasperating. For this reason, it is useful to review the SCHUFA data.
“Creating trust”
You have a right to know what data about you is stored at the SCHUFA. You also have the right that erroneous entries will be corrected. This is controlled by the German federal data protection act.
SCHUFA-report for free
Data is the asset of the SCHUFA, and this, of course, is not revealed reluctantly for free. It is therefore understandable that the SCHUFA offers a comfortable, fee-based access to their data for all citizens and advertises for this.
However, fact is that the federal data protection act determines that you can request a free written information of all your data once a year. The SCHUFA must grant you this free information. How this exactly works and how the information looks like, will be shown in the second part of this article.
Check the data stored about you!
Have you already made interesting or surprising experiences with the SCHUFA? Then please write a comment about it!
Related articles:
- Opening an online account immediately (without Schufa)
- Rent an (Post)Address in Germany
Image source: Schufa’s press service
Hi,
Two questions come to my mind, to which I didn’t know really find the answer:
– For newcomers to Germany, what are ways to start building a SCHUFA score, in order to be qualified first, just for a credit card credit line of 100 euros, which they can later ‘train’ for more?
– It would be helpful to know about all the banks besides Number26 and comdirect, where newcomers to Germany can easily open a [free] checking account [without SCHUFA], even if the free card is not required. There are many personal preferences to consider when opening an account, I would prefer to choose from a wider list if possible, according to my personal preferences. Perhaps this full list contains still less than 5-10 banks, maybe this list would fit somewhere on the site. You recommended elsewhere to maintain two accounts, and I agree. One preference is, the bank should be willing to speak English with me, which criteria neither comdirect, nor DKB fulfills. Thanks!
Hi Doug,
for the first part, I would recommend to focus on your German bank account, to get a regular income transferred there, keep it in good shape etc., and to establish a good business relationship with your bank. Then you can apply there for a credit card.
There is no official “right” to get a bank account in Germany, but German banks have mostly agreed to grant customers at least a so called “Jedermann-Konto” (as in “Everyman’s account”. That means, that even if you have not a good SCHUFA score (yet), you have the possibilities to get a bank account that does not have any credit line. So that might be the easiest option to start establishing yourself financially in Germany.
And regarding English – I would not look for something like a blanket “policy” statement of a German bank about granting services in English language. I would recommend asking at your local banks whether they have people at hand that can communicate with you in English. Many German people know at least some English, so the chances, at least in the bigger cities, should be good.
Hope that helps 🙂
Susanne,
Thanks for the tip about getting my first credit card from my bank!
Regarding English language spoken at local branches: I’m not that old to use brick and mortar branches, let alone go there in person for every small issue. In my case that would still mean a ‘blanket’ policy from the bank, which is more than likely one of those Internet banks, that they are willing to speak English in email and phone communication per policy, rather than not.
Dear editors,
I feel really so stupid about my situation specially that I’m going to talk about it in a special portal for smart bank users. But may be you can help me, it’s better late than never.
I came in Germany about 6 months ago, I got a bank account on a local branch. Then I needed a Master/Visa card to pay for an urgent flight, so I applied at N26 and ING-Diba just to use the card of the first bank that give me a quicker answer (I just deleted my N26 account after discovering your portal and that it does not recommend it anymore).
In the following months, some colleagues recommended DKB specially that I flight to my home country from time to time and it’s an awesome bank (which your portal proved), so I tried my luck and got rejected (after postId). Lately, I wanted to try again but couldn’t pass the automatic check, so I thought may be my schufa information is not up to date, and kept trying each couple of days hoping for improvement. And that was the most stupid part.
To make sure, I made a schufa request and today, I received the record, and I was surprised that my score is 85% with the information available are:
– My 3 bank accounts
– 9 antrag for kreditkonditionen from DKB
I think the last point is responsible for lowering my score.
Could you please let me know how to improve it again and what should I do in the future to avoid such stupid actions?
(And I hope that new comers to Germany can read my post to avoid my mistake)
Thank you very much 🙂 !
Dear Dramil,
First of all, congratulations – twice: Once for giving it a thought (which will benefit you in the future) and that you have gotten a Giro account with Visa Card at ING-DiBa.
It is customary in Germany for direct banks to perform a credit check with each account. These banks can finance their often free-of-charge offers only with clients, who often use their cards and are eligible for a line of credit. The banks make their money not via the account maintenance fee or cash withdrawal fee, but with the credit interest rates, even if they are comparatively low.
The Schufa score of 85% means translated: “significantly increased to high risk”. With such a score, one can understand that DKB do currently not want to open an account, since they always have a line of credit for account and card, even if it is initially often low.
The Giro account of ING-DiBa can be opened without any line of credit (current account). That is probably why the account opening has been easier.
A bank might ask: How is he going to use my account, when he has been in Germany for only a few months but already has three bank accounts? To a bank, this sounds like risk, which of course is something that banks worldwide want to avoid.
By the way: The Schufa increases with time. Six months are a very short time to be evaluated with an automated credit check.
If I was you, I would leave the accounts as they are for the time being. ING-DiBa is a great bank. And don’t apply for any loans within the next few months, it’s too early for that. Also, you should not change residences too often, since that does not bene-fit your credit check, either.
Depending on the amount of your income, one could consider applying for a line of credit for the Giro account (Dispo) at ING-DiBa next year. This will appear in your Schufa and will show that a bank considers you a credit-worthy known customer for a credit line of X. But please do wait with this step, until ING-DiBa has received at least six months of your salary/income.
Good look with the further credit improvement!
Thank you very much for the clarifications and the details 🙂 !
As I said, I’ve already closed the N26 account. The local bank branch is taking between 5-10 euros as fees every month (my salary goes there). If I make a full switch a Ing-Diba (make it my primary account), should I close the local bank account or let it be for more time to avoid harming the schufa further more?
Thank you again.
That depends on whether you want to use any local bank’s services in the future … we ourselves don’t have any private account at a local bank anymore and therefore save the monthly fees.
Dear Editorial Team:
I am wondering about some questions related to SCHUFA score.
1. When does SCHUFA score go negative? Say one starts with 100 and then going down, what are the criteria?
2. Having multiple bank account in Germany has any negative effect on SCHUFA score?
Hi There,
I have a question around the information that schufa retrieves. Is it real time! The reason I am asking this is because I had personal loan from a local bank in Berlin and today I cleared it out. My bank told me that they as a bank the information about clearing out loan immmediately to schufa and also said that it depends on Schufa company about how much time would it take to reflect on their system.
So my question is since I paid the loan amount today back to bank and if I check my schufa say tomorrow morning then do I still see my loan which I cleared out? Is it real time application?
Thanks for your reply!
Hi, I had a troubled financial history which caught up with me when I applied for a bank loan. The bank pointed me to a Schufa entry. I don’t know who made it and how much it was for. I did get some letters when a business failed but I don’t recall having any personal debts. I asked for my SCHUFA report but it did not contain the information of the company or amount I personally owe, how do I get that information? I moved house and got a letter from a debt company. I paid that. I’m not sure if there are any others. Also, should all debts outstanding with a Schufa entry catch up with me when I move?
One thing is for sure: Changing your address does NOT help you to get rid of your Schufa history. This is attached to your PERSON, not your address.
We don’t have any possibilities (and it’s very much outside this website’s purview) to asses your financial history or who you might still be owing money. I guess your best bet is to arrange for a consultation with Schufa to sort this out.
For how long Schufa keep informations about us? Bank account, credit cards, mobile providers ect…
In general, personal data is deleted three years after it is not necessary anymore. For example, data about a loan is deleted three years after the loan has been paid back.
Some information is stored for a shorter time. For example, data about inquiries is deleted after one year. Data about bank accounts and credit cards and mobile phone treaties where no trouble occurred is usually deleted right after Schufa is informed about the end of the relationship between provider and customer.
Address data can be stored for an extended time, if deemed necessary.