This is how the credit agency evaluates: concluding contracts without schufa?
Berlin schufa is almost like a secret companion in everyday life. Anyone who has a current account, wants to conclude a cell phone contract, wants to change electricity providers or wants to take out a loan.
No matter whether the credit 10.If a credit score is as high as EUR 000 or as low as EUR 100, the credit bureaus are immediately called into action. The best-known credit agency is undoubtedly schufa, which collects information about private individuals or companies and subjects it to a risk assessment.
Credit agencies, what is it?
probably the best known credit agency is schufa, but in germany there are also creditreform, burgel, deltavista and infoscore. However, the largest credit agency is still schufa, which was founded in 1927. At that time it was initially a private company, since 2000 it has been transformed into a joint stock company. According to its own data, schufa has relevant information on 68 million people in germany. This means that it records how many current accounts, credit cards or cell phone contracts each individual citizen has. the credit bureaus are also informed about the current credit situation. You are also fully informed about payment difficulties or private insolvencies.
The schufa score and what influence it has
the schufa score is crucial to schufa’s judgment of creditworthiness. The payment behavior of the individual is also precisely noted here. However, exactly how the score is ultimately determined is secret. However, certain information is not included in the score. This is all the information about which the schufa has no knowledge. This includes occupation, salary, assets, consumer behavior, marital status, religion and nationality.
Even if the ingredients that make up the score are not known exactly, certain aspects that influence the score calculation are well known. First, the risk of the individual is classified. The rating starts at very low and goes up to high.
Positive aspects of the score evaluation
The contractual behavior with regard to current accounts, credit cards, cell phone contracts, loans, purchases on account and real estate financing is classified here. It is unclear, however, what effects, for example, the possession of several current accounts, credit cards, cell phone contracts and loans has.
however, the following aspects will certainly result in a negative score: a non-contractual consumer behavior. This means due, reminded and unpaid invoices. Dunning notices and enforcement notices also lead to a negative rating. The same applies to debt collection proceedings or consumer insolvency.
How schufa collects the information?
The financial data is not collected by schufa itself, this part is taken over by the 10 or so credit rating agencies.000 schufa’s contractual partners. This includes banks, mail order companies, mobile phone companies and energy suppliers. You pass on information from current accounts, credit cards, loans and other contracts to schufa.
The question arises as to whether this procedure is at all in accordance with the applicable law. But yes, it is, as long as the customer is informed about it in advance. But this is exactly what a customer has to sign in advance when signing a contract or opening an account. You also have the right to refuse to sign, but the consequence is obvious, in such a case the contract or the opening of an account is not even an option.
In addition, data is also collected from publicly accessible sources, such as insolvency notices or the debtors’ register. Personal data is also stored, including name, date of birth, address and previous home addresses.
Since 2018, consent to data transfer is no longer explicitly required. It can therefore quickly happen that consumers no longer know whether they have been informed about the transfer of data.
How schufa handles the data it collects
As a rule, a numerical value in percent is calculated from the data, this is then the so-called score. This score does not concern an individual person, but rather a certain group to which one belongs after being classified by schufa. At the same time, however, this score is used to evaluate the individual risk of a single person. In this case, risk is understood to mean how high the risk is that a person will not meet the financial obligations, i.e. the agreed payment. In other words, the higher the score, the more likely the customer is to pay.
If there is a legitimate interest, the contracting parties can request the score from schufa. Among other things, this interest is shown by banks to which credit cards or loans are applied for, as well as by merchants for whom partial payment is desired.
As a consumer, you only get to know the industry-specific scores if you pay for the credit report from schufa, the cost here is 29.95 euros. Once a year, every consumer is entitled to a free "data copy" in accordance with Article 15 of the General Data Protection Regulation (GDPR).
A blessing and a curse at the same time
Checking the creditworthiness of a person has of course a justification. Not everyone is in a position to actually pay their debts. For merchants, but also for banks, there would then be a significantly increased risk of becoming insolvent themselves.
The problem, however, lies elsewhere. As a consumer, you have the right to know what data schufa has stored, but exactly how creditworthiness is calculated is and remains a secret. Consumer protectionists see the problem in the fact that the customer has no way of checking whether the assessment by schufa was made on the basis of incorrect assumptions.
What to do if a contract is rejected?
If a contract is rejected with reference to a bad schufa rating, and the rejecting company did not provide any further information, you should contact schufa. The facts of the case may have to be examined in detail. Information that is demonstrably incorrectly stored must be corrected. In such cases, it is always helpful to explain the situation in writing and to send copies of important documents, such as receipts or cancellation notices.
For many people, schufa seems almost omnipotent and all-knowing, but that is not the case. Mistakes are made here, illegitimate registrations happen again and again. That’s why you should check your schufa regularly, so that you don’t run the risk of suddenly being denied a contract yourself.