What is Schufa?
Schufa, as a “protection association for general security”, is a credit reporting agency that collects data on the creditworthiness of people in Germany. But what does it exist for and how is it used?
Schufa collects data on creditworthiness
The Schufa is a company that collects information on the creditworthiness of people and companies and also sells it to economic participants. To do this, it works with thousands of contractual partners who provide information on creditworthiness. This involves both Banks as well as telecommunications providers or electricity providers. These report e.g. b. Loans granted and repayment agreements as well as installment arrears.
Telecommunications companies and electricity providers report arrears from their customers' contracts. But also punctual payments of loans or bills are reported there and thus ensure a good personal creditworthiness.
This information is very important for other economic operators to decide whether to grant loans or offer contracts to certain people or even companies. In total, Schufa has collected data from over 65 million people and over 5 million companies. In addition to creditworthiness data, it also collects other data such as: b. Bank accounts that are maintained and the place of residence.
Schufa scoring is requested by banks and companies
If you want e.g. b. a credit apply to a bank, this bank will make a Schufa query. However, she cannot get access to individual items such as contracts or credit cards from Schufa; rather, she represents them Schufa provides a so-called scoring system, which corresponds to a holistic assessment of a person's creditworthiness.
Would you like to know whether you have SCHUFA entries? There are different ways how…
Scoring is used to estimate how likely it is that a specific person will not be able to repay a loan according to the contract. In the best scoring class A, only a very low probability of default of less than one percent is assumed.
Schufa must provide information about the stored data
Every person in Germany is entitled to query the data stored about them at Schufa once a year. This is particularly useful in advance if you want to apply for a loan or buy a car in installments.
There is a free PDF application form on the Schufa website that you must fill out. There is also paid information that can be accessed online.
In Germany, Schufa is an important source of information for many actors who participate in economic life. The data provided helps companies and banks minimize risks and reduce payment defaults.