The Schufa Score is a value that provides information about the creditworthiness of a contractual partner. The closer it comes to the value 100, the higher the payment behavior. But how does the Schufa score come about and can you improve it if it is too low?
This is how the credit score is calculated
Everyone knows roughly what Schufa is and that today you can rarely rent financial transactions or even an apartment without a Schufa query. Of course, the credit reporting agency is not allowed to provide detailed information about who has paid, when and where and how high loan amounts or who has not paid. But there is the so-called Schufa Score , which, the lower it is, the worse the creditworthiness.
How exactly the value is calculated is not known, because according to the Federal Court of Justice, a credit agency does not have to provide more precise information. The formula for calculating the score is therefore a secret, the data that is collected to ascertain the creditworthiness value is somewhat more transparent. This includes:
- personal data such as address, date of birth and name
- Account and credit card details or any overdraft facilities
- Cell phone contracts
- Leasing contracts
- Customer accounts at mail order companies
- ongoing bankruptcy proceedings
- outstanding loan installments
- unpaid and already dunned invoices
- Negative entries such as arrest warrants or an affidavit
Religion or nationality can be used in the calculation, as well as the employer, marital status, the amount of income or other assets and capital. However, this data may not be saved.
The Schufa Score is determined from all of the above data, together with the secret calculation formula.
How do you get a Schufa information?
In order to find out the score, one must first submit an application for self-disclosure to the credit agency. This right to information is enshrined in law; Schufa offers the required form for download directly on its own homepage.
The free information can be requested once a year according to the new data protection . However, it takes up to 4 weeks for the information to be in the mailbox.
The Schufa score table
If you receive your Schufa score information by post, you can see a value on it that assesses the creditworthiness. The base score describes the value that normally only the applicant can see.
There is another Schufa score on the information, namely the industry score, which is tailored to the needs of the industry of the respective contractual partner.
The base score and the industry score are each listed in a separate table, the level of the values is referred to as the so-called Schufa score rating.
The maximum value is 100 and describes an almost non-existent risk rate. However, only very few achieve this value, as a mobile phone contract can reduce your Schufa score. It doesn't matter whether you pay your monthly installments on time.
The further the value drops, the greater the likelihood that bills will not be paid or credit agreements will not be met. Of course, every contractual partner dreams of the highest possible Schufa score, the rating table for the base score looks like this:
- less than 50 = critical risk
- between 50 and 80 = very high risk
- between 80 and 90 = increased or high risk
- between 90 and 95 = increased to satisfactory risk
- between 95 and 97.5 = low to manageable risk
- from 97.5 upwards = very low risk
If the Schufa score is very low, it is high time to improve it.
How can the value be improved?
The higher the value on the Schufa score table, the more likely it is that you will be able to purchase on account or obtain a loan. Every industry has different criteria when it comes to concluding a contract, for some 95 is a moderate value, others reject customers with this Schufa score.
The Schufa Score is updated every three months. Negative entries such as an affidavit, an arrest warrant due to the refusal to provide information in lieu of an oath, dunning procedures, failed loan installments or even an overdrawn account - even if it is only the overdraft facility - reduce the Schufa score.
It is important to avoid such things and those who continuously develop good payment behavior can sustainably improve their creditworthiness score . This includes:
- Regularly check the entries in the Schufa for correctness and correct them if necessary
- Pay loan installments and bills on time
- Not having any unused checking accounts or credit cards
- contact the creditors in the event of default in payment and thus avoid entries in the Schufa register
- don't take out too many small loans
- don't move too often
- only make really important loan inquiries
In addition, it is always good to check your Schufa score regularly and to react to discrepancies. It also happens that the people with the same name are mixed up, so that the Schufa score is wrong. For this you should call the Schufa credit bureau immediately to solve the problem as quickly as possible.