What is SCHUFA : your credit record

SCHUFA Holding AG is the name of a private company keeping credit records of individuals in Germany.

What is SCHUFA : a somewhat intrusive credit record

The company will track all bills or fines you might have left unpaid and put them in your credit record history. That’s why people say “SCHUFA” , they often mean the record held by the company.

Your record will be check by companies like Deutsche Telekom when opening a phone account or by your bank when you apply for a loan. They will then be able to tell if you have debts or not and if you can be trusted as a customer.

The company is basically rating your ability to pay your bills. This record (called SCHUFA Auskunft) will follow you everywhere as consumer in your everyday life, you‘d better keep it clean !

As a foreigner, it will be automatically created when you have completed your Anmeldung at the Bürgeramt, opened a bank account, and subscribed to a first contract like for an internet line for example.

What is SCHUFA : an efficient way to limit your debts

The cleanest SCHUFA score you get at the beginning is rated at 100% . If you don’t pay your bills, this score will decrease accordingly to how much you have been naughty. If it does, it can limit your ability to undertake other contracts which can be frustrating. However, this system is preventing that you become overwhelmed by debts overtime. However, even if you pay all your debts, your score will go down a few percents for some reason. It is completely fine to have score down to 92% for example.

That’s not all bad you see ?! Schufa actually stands for : “Schutzorganisation für Allgemeine Kreditsicherung” which roughly translates to “organisation for general credit safety protection”

As a foreigner, try to “populate” your record with positive entries by paying your phone bills, electricity and gas bills  and so on. It will come handy when you will want to apply to a loan in the bank. In my experience, even if you have been for a while in Germany, if your SCHUFA Auskunft doesn’t look clean, it will be hard to convince your bank.

Landlords ask also very often your credit record to be able to rent a flat.

FAQ

How do i order copy of my SCHUFA record?

You can order a record from the company directly on the following website. It costs only 24,95€. (click on Bonitätauskunft on the homepage) : https://www.meineschufa.de/. Some Postbank centers do offer to print one for you on the spot as well for the same fee. No need to be a Postbank customer. This report is sometimes the preferred report from banks or landlords, because it contains more details.

However, you are entitled to one free record per year that you can also get from the same website here. On this page, click “Jetzt bestellen” on the right “Datenkopie (nach Art. 15 DS-GVO)” column. Enter your data on the page that follows. You will be able to upload a copy of your passport (“Dokumentupload” > “Kopie des Reisepasses”) and a copy your Meldebescheinigung with it.

Help, i am stuck: I need a SCHUFA record to rent a flat, but i can’t get one until i’m registered somewhere.

This is typical chicken-&-egg situation for many foreigners moving to Germany: landlords ask for a SCHUFA record for you to rent their flat, but you don’t have one since you are not registered (Anmeldung) and can’t open a bank account… because you don’t have a place yet. If you are in this situation, you might want to go for a flat share (WG) and register there until you find your own place. You can also turn to services like Wunderflats, which lets you rent furnished flats without a SCHUFA record.

What should i do if i get a negative entry in my SCHUFA record?

Their FAQs on the matter is not giving any magic formula unfortunately. The only thing you can do is try to resolve the cause of that negative entry as soon as possible and keep the rest of your financial related affairs in order. This mainly means paying all your bills and credits in time, and never use your overdraft possibilities if possible.

Negative records are impacting your score up to 3 years after you resolved your unpaid bills case and it can be kept as a “FYI side note” for up to 6 years overall. Here is a more detailed table.

How do i keep my score high?

To keep a good SCHUFA score (above 90%), those are the few recommended things:

• Don’t open too many bank accounts in different banks and limit the amount of credit cards you own
• Don’t switch bank account too often
• If possible, try to keep healthy reserve in the accounts you own
• Pay your bills on time
• Check your SCHUFA-score once a year and correct any mistakes you might see

Are there any other institutions rating consumers in Germany?

As it turns out, there are several. SCHUFA remains the most important and influential one but other ones can hold data about you. That is a bit scary i know, and quite unexpected from a country so strict about data privacy. You can find out about them and request a record from each via this website for free.

2 more important things

The SCHUFA will hold information about you long after you leave Germany and at a European level too. If you plan to leave unpaid bills behind and then come back to Germany, you might have to think twice before doing it. It could become harsh back fire in the near future.

This system makes that your personal wealth, your personal property or yearly income doesn’t have any influence on your record ! You could be the richest man in the world but still have the worst record if you didn’t pay your bills. Just bear that in mind.

I hope this introduction to a very German institution cleared things up fro you. Feel free to ask questions in the comments.