This is what your Schufa Score reveals about you
Your Schufa score is relentless. It tells the truth about you when someone asks for it. Pay your installments on time? Do you have rent debt? Some even claim that the Schufa base score changes with the area in which you live. Bad cards for residents of a maligned neighborhood. Or not? Learn more about what the Schufa Score really reveals about you!
FAQ about the Schufa Score
What does Schufa Score mean?
Schufa score is a numerical value that gives information about personal creditworthiness. It is calculated by the credit agency Schufa and often serves as the basis for decisions on concluding contracts and granting loans. The Schufa score is a value between 0 and 100. The closer one's score is to 100, the better it is, and the higher the credit rating.
When is the Schufa score updated?
The Schufa Score is updated and recalculated once a quarter and thus every 3 months.
What is a good Schufa score?
From 95 % a Schufa Score is good. A Schufa Score of 97 to 99 is considered very good.
About the Schufa Score
This is important
It often seems like a secret society: the Schutzgemeinschaft fur allgemeine Kreditsicherung, or Schufa for short. This is because the most influential of all credit agencies works in secret. At the same time, it has incredible power: if Schufa says you are creditworthy, then it is so. At least for the majority of their more than 9000 contract partners.
These include telecommunications companies as well as mail order companies. While they can also make their decision independently of Schufa at any time. Yet hardly anyone does. The reason: the forecast by means of scoring procedure is considered absolutely credible.
What the Schufa Score says about you
"To score" comes from english and means "to score points". So your score rates you. The procedure for this is called scoring procedure. In other words, you score points with your behavior. Schufa processes everything it can get its hands on: Data from your contracts as well as from public directories, such as debtor directories.
Tip
Collected but not only negative. Popularly overlooked in the legend of the mighty Schufa: positive entries count, too. So if you have always paid your installments on time, then you may have a lot of entries in the scoring procedure. The but have a positive effect on their Schufa score. So it is not the number of entries that is decisive. "Oh God, I have a Schufa entry!" – this sigh of relief should more correctly read: "Oh God, I have a negative Schufa entry!"
Schufa score – looks into the future
Thus, the Schufa Score reveals one thing above all: What is your creditworthiness?? This in turn tells you whether you can be sold a refrigerator on installments with a clear conscience. So whether you are creditworthy or not. Because payment by installments is nothing more than a loan!
So the Schufa Score is actually about two different things – what you have done in the past? And what will you do in all probability in the future? This is the so-called forecast. If your behavior has always been impeccable in the past, then Schufa concludes that it will remain so. Of course, you can never be completely sure, which is why no one gets a Schufa score of 100%.
This is what Schufa collects about you:
personal data that identifies you beyond doubt, z.B. Your address
So if you want to finance a car, not only the purchase is important for the scoring procedure. The bank's creditworthiness inquiry is also stored! The amount and term of the loan influence your Schufa Score just as much as whether you have paid everything on time. The thing with the residential area is according to Schufa, however, a rumor! It does not normally flow into your score.
The Schufa score and the economy
At this point, a word about scoring: Because it provides information about your creditworthiness, the score value facilitates business decisions. Large companies can use it to automate these decisions. If it is applied en masse, then a company can protect itself from economic damage. That is why scoring is important: it creates a relatively independent tool that has enormous economic significance.
Is the Schufa score intransparent?
This is important
Your Schufa score is therefore calculated using purely mathematical methods. The use and processing of your data is constantly checked: by the Hessian data protection commissioner, for example, to whom Schufa is subject for supervisory purposes. Scoring procedures are therefore by no means non-transparent.
The Federal Commissioner for Data Protection also keeps a close eye on Schufa. Only the public, i.e. you, cannot access this data so easily. Schufa justifies this with the danger of manipulation. Also, in 2014, the Federal Court of Justice confirmed that disclosure to the general public cannot be demanded.
However, with the Schufa Score, you have the right to self-disclosure regarding your own Schufa Score value. If you take it up, you will receive a letter with various details. It does not only contain your Schufa basic score, because depending on the purpose, Schufa also uses other scoring procedures.
Fifty-fifty – why fifty percent is not always good
A good Schufa Score has a certain value. Fifty percent, for example, will be of little use to you for most business models. Translated, this means that fifty percent of your credit score is expected not to be repaid. Certainly no business partner wants that. As very good is considered >97. Here there is a very low risk for your business partner that you will not service your credit. The very critical risk, on the other hand, which is classified as extremely poor, is 50 percent or less.
Your Schufa base score is therefore given in percentage points. In addition to the Schufa basic score, there are also other score values. They apply depending on the industry. Here Schufa works with rating levels – which are of course also calculated by points. You know this from the world of finance, from rating agencies. Just one example of your Schufa score with banks.
There the first, the rating level A, means: You have 662 – 999 points. You are assigned a probability of default of only 0.85%. Very good! But more is always possible: worse rating levels are then B, C and so on until M.