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.
SCHUFA receives data from virtually every company in Germany, with around 10 000 cooperating partners in every industry (finance, insurance, Telco, shopping, etc). When you make a contract with one of those, that’s when your record is created. Usually for newcomers, it starts with the bank.
Data collected by SCHUFA
|General information||Financial data||Payment faults|
|Name||Existing checking/currents accounts||Bounced checks|
|Birth date||Credit cards||Dunning procedure|
|Birth location||Cell phone contracts||Enforcement notices|
|Current address||Leasing contracts||Private bankruptcies|
|Previous addresses||Data about current/past loans|
SCHUFA does not retain any information on: marital status, nationality, employer, income, assets or savings accounts. Furthermore, the storage of sensitive data like religion or origin is strictly forbidden, as stated in article 9 of the GDPR.
Impact of SCHUFA 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.
Most crucially for newcomers; landlords will require to see your SCHUFA score to be able to sign the lease. This can be challenging because newcomers often don’t have a SCHUFA score to start with! This often why we tend to move into flat share, sublets or short-term accomodation first.
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”
How to get a free SCHUFA record
Any German resident has a legal right to review the data contained in their SCHUFA score, as per defined by law (§ 34 Bundesdatenschutzgesetz (BDSG) or in GDPR regulations)#. This is why you can request at least one free copy once a year. SCHUFA calls it “Datenübersicht” (Data overview) or “Datenkopie“. This free record contains all the necessary information for landlords.
This is how you get a free SCHUFA record:
- Browse to SCHUFA’s website and find this page.
- Look for the right column titled “”Datenkopie (nach Art. 15 DS-GVO)“” and click “Jetzt beantragen”.
- The next screen contains several fields to input your personal information. Fill them in. You can also upload a copy of your ID card, passport & Meldebescheinigung (residence registration certificate).
- Once you have submitted a request, you will receive a paper copy by mail after several days.
How to get a SCHUFA record faster
You might need your SCHUFA record faster than what the free method allows. In this case you can turn to another option.
You can order a BonitätsAuskunft record for a 29,95€ fee, directly from SCHUFA’s website on this page.
- Click on “Jetzt bestellen” and follow the screens, requesting your personal information.
- Fill in the payment method/information.
- Download your SCHUFA report right away.
Alternatively, you can also queue at one of the Postbank branches to obtain a printed copy for the same price.
How to improve your score
The table below shows you how long a particular entry stays in your record. Below are some recommendations on how to improve your SCHUFA score.
|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|
- Use the SCHUFA score simulator. It contains tips on how to improve your score. It also explains how their calculation works.
- Limit the amount of bank accounts you have in Germany.
- Don’t go too much or too often in overdraft with the accouts you already have.
- Pay your bills on time. Your creditor does not communicate to SCHUFA late bills right away, but they will eventually impact your score in you don’t resolve them.
- Keep an eye on loans, mortages & credits: late payments can negatively impact your score, paying them on time can impact it positively.
- 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 for you. Feel free to ask questions in the comments.
Your SCHUFA record is the German credit score. It contains all the data you generate as a consumer, together with an overall rating.
As a credit rating institution, SCHUFA receives data from its approximately 10,000 cooperation partners, including banks, insurance companies, energy suppliers, leasing and mobile phone companies.
As soon as you have concluded a contract with one of the cooperation partners the consent to the data transmission to SCHUFA is usually given.
You can order a record from the company directly on the following website. It costs 29,95€. (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 beantragen” 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.
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”, as per EU law. I guess 2-3 times a year is all you will need anyway.