What is SCHUFA? Contrary to what most people think, it is not some blacklist where the names of people who have defaulted on a loans are kept. SCHUFA Holding AG is the name of a private company that keeps credit records of individuals in Germany. It stands for stands for : "Schutzorganisation für Allgemeine Kreditsicherung" which roughly translates to "organisation for general credit safety protection" It tracks all credit behaviour. For example bills and fines one might have left unpaid and put them in their credit record history. So when people say "SCHUFA" , they often mean the credit record held by the company. This record it keeps is checked by companies that provide any kind of credit or payment with installments as well as Banks. It tells them if one has debts or not and if they can be trusted as a customer. The company is basically rating ones ability to pay bills. This record (called SCHUFA Auskunft) will follow one everywhere as a consumer in their everyday life, So it is in you best interest as a customer to 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. Why is it SCHUFA so important? Whether you are applying for a loan, making a mobile phone contract, changing your electricity provider, or renting a car or house, the provider can ask for SCHUFA information about you. In some cases employers can ask for a SCHUFA report. A negative schufa score can restrict your ability to borrow money, rejection of contracts or even rejection of an application to open a giro account.It may even prevent insurers from contracting with you. Thus the application for a car insurance can become problematic. With a bad score, you may be paying more interest or may even get no credit. Shipping and online merchants often decide which payment options they offer customers based on the score. Consumers with bad SCHUFA scores often do not have the opportunity to buy on credit. How does the scoring work? Here is an example if the Schufa score table; Some examples of information schufa gathers to create the table include;

  • Number of debit and credit cards including the date you have them.
  • Your use of loans (including Dispokredit).
  • Mobile phone and leasing contracts.
  • Previous payment delays (e.g unpaid credit rates, invoices from mail-order houses or other providers)

How does one get a negative score ?

  • Reports from suppliers about unpaid invoices.
  • Court summons or visits from baliffs.
  • Overdrawn/negative accounts or excess use of dispo.
  • Unpaid or late paid installments for your credit.
  • A lot of debit accounts and credit cards.
  • Frequent borrowing: Making a lot of small-scale financing purchases.
  • Many credit/ loan requests from banks.

Other notable issues;Frequent change of residence: This could be interpreted as irresponsible behaviour and make your findability more difficult. Age: Younger people are considered to be rather untrustworthy. This statement has little to do with the individual. The most attractive for lenders are people around the 50. How long do these negative entries stay on my record? 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 check my SCHUFA report?In accordance with § 34 of the Federal Data Protection Act, you have the right to know what data are available to you from SCHUFA. Once a year, you will be given a free data overview, which contains all SCHUFA data about you. You can apply for this in writing via the SCHUFA website and receive your information after approx. 3 weeks.This is the link, they intentionally make it cumbersome but it is worth it.You will need to upload a copy of your passport and a copy your Meldebescheinigung with it. If you are curious to how a report looks like check out this link How do I keep score up?

  • Don't open too many debit accounts in different banks. Close any not in use.
  • Use dispo (Overdraft) wisely.
  • Limit the amount of credit cards you own.
  • Don't switch bank accounts too often.
  • If possible, try to keep healthy reserve in the accounts you own.
  • Pay your bills on time.
  • When shopping around for a loan, ask the bank for a condition sof loan request instead of a credit request. There is an important difference between a condition request and a credit request . Anyone who is interested in a loan is checked by the bank for creditworthiness. However, a condition request from the bank is neutral for your SCHUFA score, so it is not marked as an entry. However, credit and loan reqests, especially if they accumulate, can have a negative impact on SCHUFA.
  • Live in a good area, although SCHUFA claim that they rarely take address and area into consideration, some addresses insight a negative reaction from vendors.
  • Always check, review and correct any mistakes on your schufa report.

What should one do if they get a negative entry in my SCHUFA record? 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. Other Notable info *You can order a record from the company directly on the following website. It costs only 24,95€. (click on Bonitätauskunft on the homepage) : . 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. 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. *The way the system is set up your personal wealth, your personal property or yearly income doesn't have any influence on your record! You could be the richest person in the world but still have the worst record if you didn't pay your bills. Just bear that in mind.