Key takeaways
- Schufa is a credit rating agency. It collects customer data from its partner companies and, in return, shares the stored data with them.
- You have the right to get your data stored at Schufa for free.
- Schufa doesn’t store your data forever. It follows the industry’s guidelines on data retention.
- Factors like timely repayment of bills, loans, credit card invoices, etc., positively impact your Schufa score.
- If you are new to Germany, you won’t have a Schufa entry. Your Schufa entry will be created once you open a bank account or get a telephone contract, utility contract, or credit card.
This is how you do it
- Get a free Schufa report annually and ensure that the data stored by Schufa is correct. If not, contact Schufa with proof to correct the information.
- If you are looking for an apartment to rent in Germany, it’s recommended that you use a paid Schufa creditworthiness certificate via meineSchufa.de*.
- Get your data from other credit rating agencies, such as Crifbürgel or Arvato, and ensure it’s correct.
Table of Contents
What is Schufa in Germany?
Schufa is an agency that collects customer data from different companies (contractual partners). The data includes your personal and financial information.
Schufa, in return, provides this customer data to companies. Companies can use this information to get an idea of consumers’ financial situation, especially their creditworthiness.
Schufa assigns each customer a score based on their loans, bank accounts, credit cards, and other data. Banks, credit institutes, landlords, etc., can use this information to conclude or determine contract terms.
You can also think of a Schufa score as a credit rating. The better the Schufa score, the better your chances of getting favorable contract terms are.
What information does Schufa store?
According to Schufa Holding AG, it has data on more than 68 million natural persons and 6 million companies in Germany [1].
Schufa gets the data from the companies. So it doesn’t have to ask the consumers for their data. However, the companies that pass on the data must inform their customers about it.
Here is the information that Schufa stores. [2]
Personal information:
- Name
- Date of birth and, if applicable, place of birth
- Current and previous addresses
- Your personal SCHUFA basic score
Information SCHUFA gets from its contractual partners:
- Credit cards
- Leasing contracts
- Current or checking account
- Installment transactions
- Current and paid-off loans and guarantees made against the loan.
- Private bankruptcies
- Dunning procedure
- Bounced checks
- Cell phone contracts
- Leases
- Enforcement notices
SCHUFA has NO information about your:
- Assets and income
- Profession
- Marital status
- nationality
- Political and religious beliefs
How long does Schufa store your data?
Schufa doesn’t store customers’ data forever. They adhere to the code of conduct agreed by the “ Business Credit Agencies.”
As per this code of conduct, Schufa stores different types of information for different periods.
| Type of information | Deletion time |
|---|---|
| Information about loans | Three years after loan repayment |
| Information about checking and credit card accounts | after notifying Schufa that the account has been closed |
| Credit Inquiries | 12 months after request |
| Credit conditions inquiries (only visible to consumers) | 12 months after request |
What information does Schufa provide to companies?
Schufa shares the information it has stored in its system with the companies. However, companies are more interested in knowing if the customer has any negative features.
For example, canceled bank loans as the customer stopped paying, payment defaults, entries from public debtor registers, etc.
Schufa also shares the credit score (Schufa score). Schufa calculates the score by analyzing your data and comparing it with the data of other individuals.
The Schufa score represents the probability (0 to 100 percent) that the customer will repay the loan. The higher the score, the more likely the customer will repay.
What do you need a good Schufa score for?
Banks and companies ask for a Schufa score to assess your creditworthiness. Here are the most common cases when you need a good Schufa score.
- Loan (Car loan, personal loan, etc.)
- Credit cards
- Shopping online and want to pay in installments
- Cell phone companies, when offering a new phone in installments
- Landlords to ensure the tenant has no residue rent payments
The banks and companies don’t only consider the Schufa score while concluding a contract. They also collect other information from you, like your current income, marital status, etc., while doing the risk assessment.
How do you get a copy of your Schufa score?
You have the right to get the data (yours) stored by Schufa for free (Article 15 GDPR). However, you can also get a paid Schufa creditworthiness certificate if you are looking for a rental property.
Order a free Schufa report online
You can apply to get your Schufa report on the Schufa website. You’ll get the report within a month.
Schufa requires you to fill out the following information to get the report.
- Personal information, such as name, address, etc.
- Upload personal identification documents like Passport, Residence permit, and Registration certificate (Meldebescheinigung)
NOTE: Ordering the Schufa report has no influence on your Schufa rating.
You must check the data and ensure that it’s correct. You have the right to have Schufa correct any errors immediately and free of charge.
Check your Schufa basic score online for free
If you just want to check your Schufa basic score, you can register with Bonify. You have two options to register with Bonify
- identify yourself by uploading a personal identification document and taking a selfie
- or login to your bank account to verify yourself.
Bonify accesses data from Schufa and displays the basic Schufa score. If you want detailed information, you must apply on the Schufa website.
Paid version of Schufa creditworthiness certificate
Schufa points out that the Schufa report contains confidential information that a potential landlord doesn’t need. So, if you want to prove your solvency in rental matters, Schufa recommends a fee-based credit report (29.95 €).
You can order it online at meineSchufa.de*. Then, you can download the digital copy and use it to rent an apartment.
What information does a Schufa report have?
Schufa report that you get for free from Schufa Holding AG has the following information.
- Personal data: Your current and previous addresses, date of birth, place of birth, etc.
- Credit-relevant data: Data about you that Schufa collected from its partner companies, such as your checking account, credit cards, etc.
- Inquiries from companies: Companies check your data stored at Schufa to assess your creditworthiness or verify your identity. On this page, you can see the inquiries made by different companies.
- Basic Schufa score: Schufa calculates the basic score quarterly based on your stored data. It serves as a reference for you and is not shared with the companies.
- Schufa score values transmitted in the past twelve months: In addition to your basic score, Schufa calculates different scores based on industries (credit, telecommunication, etc.). You can see which Schufa score was shared with which company in the past twelve months.
How can you improve your Schufa score?
How Schufa calculates its score is a trade secret. The Federal Court of Justice decided that Schufa doesn’t have to disclose its calculation method (judgment of January 28, 2014, Ref. VI ZR 156/13 ).
The reasoning behind it is that Schufa doesn’t use the score itself to assess whether you get a loan. It only shares the data with other companies.
However, Schufa has a score simulator that you can use to simulate your Schufa score based on different situations. This also gives you a hint on what factors affect your Schufa score.
We have summarized them for you here.
- Don’t keep too many bank accounts and credit cards: If you have multiple bank accounts and credit cards, your Schufa score will be negatively affected.
- Bank overdraft: Schufa Holding AG explains that they don’t consider the “bank overdraft amount” when calculating the Schufa score. However, if you overdraw the overdraft and the bank ultimately terminates the overdraft facility or your account, this negatively affects your credit rating.
- Bill payments: Your Schufa is affected by whether you pay your bills on time or not. Moreover, bill payment is not limited to loans or credit cards but also cell phone or utility bills. However, a creditor cannot pass on every default to Schufa immediately. The company must warn you at least twice in writing. Additionally, there must be at least four weeks between the first reminder and the transmission to Schufa (Section 31 Para. 2 No. 4b BDSG new).
- Loan repayment: Your Schufa score will be negatively impacted if you are unable to pay your loan on time. On the other hand, it will be positively impacted if you pay back the loan on time.
- Get the Schufa report annually for free to verify your data. If you find an error, get it corrected.
- Cybercrime: Suppose you are affected by identity theft. The thief buys something online on credit using your personal information. In this case, you won’t know that a purchase has been made, and the creditors won’t get their money. This negatively affects your Schufa rating, even if you did nothing wrong. If this happens to you, you can contact Schufa using this form. You need a police report when submitting the form.
NOTE: You can only know that something like this has happened if you check your Schufa report regularly. This is why requesting and checking your Schufa data annually is critical.
Other credit agencies, such as Crifbürgel or Arvato, also collect your data. You should request a copy of your data from these companies and ensure it’s correct.
