I've been living in Germany for over 3 years now, and had never been asked to submit my SCHUFA score on any occasion so far.
But I thought I might get one now anyway just to see how I'm rated, so I did.
My SCHUFA records and score arrived a couple of days ago, and I was quite surprised by how low it was.
I had an overdue payment of my Bahncard more than two years ago, which I expected to lower my score. But otherwise, I haven't had any of that sort nor any loan.
For about half a year, I've been looking for a new car and a couple of times I got pretty closed to signing a contract during which either the dealership or banks that I asked for car loan rates seem to have referenced my credit score, which is fine. The point is, I haven't actually bought a car nor got a loan. However, my SCHUFA score seems to have gone up and down with those events between 90-98 and ended up slightly below 94, which doesn't look good.
And those are basically the only things listed in the record except for the overdue payment mentioned above.
Now, my question is; Is it likely that my score will go back up over time assuming no overdue payments nor loan? Also, is it likely my score will severely decrease once I actually get a car loan?
My SCHUFA score is quite low
SCHUFA, as private (for-profit) business, is a law unto itself. The algorithm they use to determine a score is confidential, as is which parameters are considered and how.
If there are certain items listed that are not true, you can send in proof and ask for them to be removed. But this is a long and buerocratic procedure, hardly worth your time.
The best you can do is igore it as much as possible and not do anything where it plays a role (e.g. do not take a loan or mortgage, rent only from reasonable landlords that do not put focus on this, etc.), which is good advice for other reasons, too.
I am not an expert on it but as I understand having no debts or ever borrowing money does not give one a good rating. Not paying debts is bad but the way one builds a high rating is taking loans or having bills and paying them off on time. It can be a vicious circle that one cannot get a big loan for a good rate. So one needs to start small. They use credits cards and maybe take small loans from a bank and pay them all off on time. Then as the rating building they can do it on a larger level. One can be outside of the whole system and never have any debt but the effect is that they will never have a good rating and be able to later get a large credit. People naively think that never having borrowed or owed money will be seen positively but it isn't. They want to see a track record of people borrowing and responsibly paying the money back. And this is not just Germany, this is how the system works virtually everywhere now.
I have so far fared pretty well by never spending more than I have.
If they rate me down because of this, the system is even more stupid than I thought.
But I never checked (and do not care) what my SCHUFA score is.
beppi wrote:I have so far fared pretty well by never spending more than I have.
If they rate me down because of this, the system is even more stupid than I thought.
But I never checked (and do not care) what my SCHUFA score is.
I have no idea what my Schufa score is either. And I really don't care. But for people who actually need to borrow money like getting a mortgage or car loan then it can be relevant. I tend to pay things in cash or bank transfers and almost never use a credit card. But if I wanted to improve my Schufa score then I could change my habits and buy most large purchases with a credit card but then pay it off right away. In this way one doesn't incur the high credit card rates yet improves their Schufa rating.
I don't want to get into a discussion about the logic of the system but to point out it shows people's ability to borrow and properly pay back - and not their actual financial status. One could be a billionaire with lots of liquidity and still have a low Schufa score as far as I know.
Hey! Maybe this site can help you if you need professional help with debts and your Schufa score:
https://www.schuldnerberatung.org/schufa-schulden/
Your score will increase again. But that takes a long time. The queries of the car dealers were with a wrong key. In a pure query, your score value must not decrease. Unfortunately, this happens very often, even if you ask for mobile phone contracts, etc. You can inform the credit bureau and ask them to correct the value because you have not concluded a contract.
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