What is SCHUFA: all about your credit rating in Germany and how to keep it high.
Among all the hurdles I had to conquer when moving to Germany, I never thought one of the tallest ones would be a credit rating institution. Yes, the first time I heard of it, I also asked myself: what is SCHUFA? And why does it represent such a challenge for newcomers to Germany?
This post aims at answering all that, based on personal experience and additional research.
What is SCHUFA: a somewhat intrusive credit record
SCHUFA Holding AG is a company acting as a central place where information about you (as a consumer) is sourced from utility suppliers, banks, internet providers & more. The company will track all bills or fines over time. Using this raw data and parsing it through an algorithm of their own, they create and record a credit rating score for all German residents. That’s why people say “SCHUFA”, they mean the record held by the company.
The company is basically rating your ability to pay bills. This record (called SCHUFA Auskunft) will follow you everywhere as consumer in your everyday life, you‘d better keep it clean. Otherwise, consequences could be serious.
Its impact on everyday life
Your SCHUFA record will play a role at almost every major step of way in your new life in Germany. Your record will be checked by companies like Deutsche Telekom when opening a phone line 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. Landlords will also almost always require for your credit record to be able to sign the lease.
It can also be a lot more trivial: I was not able to buy my phone as part of my mobile phone contract because my SCHUFA score was non-existent at the time.
That sounds awful, but is it really all that bad?
What is SCHUFA: an efficient way to limit your debts
The cleanest SCHUFA score (called “Basisscore” you get at the beginning is rated at 100%, in theory however. 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 95% for example.
To give you perspective, here are the different “Basisscore” tiers and what they mean. It measure the probability with which you will honor your bills, credits, contracts, etc.
| Score value | Risk assessment – Level of risk |
|---|---|
| > 97,5 % | Very low |
| 95 % – 97,5 % | Low to negligible |
| 90 % – 95 % | Satisfactory to elevated |
| 80 % – 90 % | Fairly elevated |
| 50 % – 80 % | Very elevated |
| < 50 % | Critical |
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”
FAQ
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 the preferred by landlords, because it contains all the details.
However, you are entitled to a few free requests 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.
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.
To keep a good SCHUFA score (above 95%), 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.
Not at all. Your current employment situation is not relevant for your SCHUFA score. Making use of unemployment benefits is also not relevant.
However, if through that loss of income, you run into trouble paying your expenses on time, this will be reflected negatively and lower your score.
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.
It’s not possible to use foreign sources to influence your current rating unfortunately.
As a newcomer, it will be automatically created when you have completed your Anmeldung at the Bürgeramt, opened a bank account, and paid a few bills with an internet access provider for example.
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. See a detailed table hereafter.
If you go for the paid version in the form of a subscription, you have access to your data at any time. If you want to order the free version, you can request it a few times per year. There is no clear number on this, only that it should be “appropriate”. I guess 2-3 times a year is all you will need anyway.
| Information entry | How long it stays in your record |
|---|---|
| Entries about credits / loans | 3 years after paying it back |
| Credit / loan requests | 12 months after request |
| Entries about your current bank accounts and credit cards | When closing the account |
| Requests from third-party companies | 12 months after request at the latest. |
| Entries about paying your bills late | 3 years or 4 years in case of unresolved disputes or longer sometimes. |
| Entries coming from the Amtsgericht concerning your possible debts | 3 years or sooner if debt has been declared resolved by the Amtsgericht. |
| Customer accounts with third-party companies | 3 years |
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.
Hi I received a bill saying that if I not pay it will receive legal action, silly me I just pay one of them and now I don’t know what to do. The date already pass by 5 days.
Hii brother ,
Thanks for the information , actually i am also facing the same problem , i had corona virus when i was travelling to West Germany , i cought corona virus , when i went to the hospital for test ,they supposed send me the bill of that test as a invoice , which was of 152 euro , I didn’t pay that money because didn’t receive any letter’s it has been 4 months , according to them the bill was increased 5 % every month , now i am facing problems to getting mobile contracts , and credit as well , so my question is if i pay my debts immediately , is this possible to get mobile contracts or any other services as soon as possible or it takes time to fix itself .
Hey Yudhister. Sorry to hear about your troubles. You can look into the table again, it shows how it takes for the score to improve again. You may want to contact the hospital finance departement as well, to try to resolve this asap.
Hei!
Thanks for sharing your knowledge with us! With my partner, we are currently in the process of moving to Koln. My boyfriend is moving a few months before me as I’m still in the recruitment process. We were checking on flats to rent and got a bit surprised with Schufa. The concept of this kind of database is familiar however I’ve never expected the rating to be used in such a wide range (I’m used to the customer-bank relationship). Anyway, thanks again! Cheers!
Hello,
Thanks for the nice information. Actually, now I am getting problem with Broadcasting fees. I have not enough money to pay because they added lots of charges. I did not received before, but I received invoices with high fines now. So, I am planing to pay in installments even I am not using their services. If I could not pay whole amount of invoices and left Germany, what will happen? How long my record would be here? If I wanted to come back after 5 years, record will be erased?
Hey Sharukh. You can refer to the table in the post to get an indication on how long records are held. I cannot give you a precise duration for your case.
Hi,10 years ago I take mobile phone contract, and left the country not paying bills, I decided to go back in Germany, should I be ready for big bill to pay now!
Thanks for answer
¯\_(ツ)_/¯
Hi, i have doubts on Germany and currently iam not living on Germany, if i came to Germany do i get in trouble with law, police or anything or just have bad records on schufa?
And can I pay monthly my debts on schufa?
Thank you.
Hey Ardian. Do you mean, you have debts in Germany? The SCHUFA is not involved in paying back debts. Unless you have done a criminal offense, you won’t be in trouble with the law.
Hey Bastien,
Thank you for all this! I have a short question: when it comes to one SCHUFA per year free of charge, are we talking about January-December kind of year or are we talking about 12 months from the request?
For example, if i request it in November, will it be available for free in January, as part of next year, or will it be in 12 months, therefor next November?
Thank you in advance!
Hey Nicole. Thanks for your comment. It made me research the topic and provided me with a valuable update on this post. You can now order a copy of your record several times a year, thanks to a EU ruling. Source.