Schufa - the German credit rating system

211 posts in this topic

Posted

 

post-16-1095400694.png
So here is the million dollar question. How does your american credit file effect your german credit or schufa I guess.

 

Speaking of SCHUFA (or the german credit system) How does it work?

 

Can I make my SCHUFA better?

 

Can I see my SCHUFA ratings?

 

What should I be careful of??

 

Thank a million

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Posted

Your american credit file effects your german credit or schufa not one iota (is this the answer you wanted to hear?)

 

Any financial deal you enter into (opening a bank account, getting credit, leasing a car, getting a credit card or mortgage) will require your agreement for them to submit your details to Schufa and/or check your entry there. Any company can check your rating at any time, so long as they have good reasdon (and your approval).

 

To make your SCHUFA better stay within your credit limits, make all paýments on time, and don't overstretch yourself on credit

 

Yes you can see your SCHUFA ratings - complete the form your find here. It costs €7.60 which is deducted from your bank account - they mail you the information by snail mail

 

You should be careful of getting into debt, not meeting any payment schedule or failing to pay an invoice.

 

YL6

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Posted

in moving in with my bf, he simply says it would be easier to put everything in his name. okay, agreed. but my mom said no, i should try to build up good credit. this is what you'd do in the u.s. to establish a credit rating.

is that the same principle in germany too? right now the only thing i pay for regularly are my cell phone and credit card (but that is automatically deducted from my account). i have no car, no credit from the bank, etc. i had a schufa thing done when i opened up my depot.

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Posted

Yeah, you should try to build up your own credit rating in Germany if you are intending on staying here. Otherwise it might be difficult in the future to get credit.

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Posted

I don't know what the deal is over here (your bf probably has more idea), but the British system appears to be the same as the American system.

 

I have deliberately kept my British bank account and credit card alive just to maintain a credit rating in Britain should I ever choose to go back.

 

I know you've got your phone bill, but I would suggest you get at least one 'flat-related' bill in your name as well. Just to be on the safe side.

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Posted

talked to my bf and he seems to believe that as long as schufa doesn't have any info on you, then you're better off. i could not explain to him in any language the concept of establishing credit! i felt like talking to a wall.

 

he said a bank wouldn't give me any credit anyway cause i already have debt (student loans). he says a bank would only give him a maximum of €20k credit cause that is all he could realisitically afford to pay back. i said what about people who buys houses, etc. and he said either they have €100k to put down or they use something as collateral.

 

is he naive or is this true? in the u.s., anyone with a job and a decent credit history can get a loan. i find it hard to believe that most germans these days can pay anything cash down. not any more. maybe i am the one who is naive. <_<

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Posted

As far as credit is concerned, it's the wild 80's in the U.S. all over again. Banks

shove it down yer throat, if you have had a regular income, and use their EC card.

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Posted

elfenstar: the man is right to a very large extent, spookily enough

 

this is part of the reason why so few germans own the property they live in (like 40% of the population or so, as opposed to 70-90% in UK, US, spain, belgium, whatever)

 

german consumer finance is *extremely* primitive compared with most other european countries (with the exception of the concept of online ueberweisung which works reasonably well, but belgians, dutch, swiss, and even several UK banks now have that as well)

 

e.g. when did you last hear of a retail bank charging you just to have an account with them, or even for a credit card??

 

<pet peeve> then again not much point in having a credit card in D coz hardly anyone takes them </pet peeve>

 

germans stick with their "hausbank" for a lifetime, which then observes every penny coming in/going out and gives credit on the basis of the clients overall "financial position". the (for us simple) notion of shopping around for a good deal on, say, a mortgage or a credit card or even a car loan is very unusual

 

(chicken and egg situation: a financial institution where you are not a client cannot safely give you credit without the concept of a "credit rating". the only ones who have information that could lead to an objective "credit rating" are banks, who would be the main losers of you shopping around for a better deal on credit products. geddit? the excuse the banks use: datenschutz, so they make it look like they are protecting their customers. clever. but transparent. unless you are a Heinrich then you are likely to agree that this is good practice...)

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Posted

Someone must have introduced a U.S. CRM software tool to my bank. Because the marketing letters they bombard me with mimicked in some idiotic, provocative fashion my financial interactions. Which led me to add "CRM sucks, no loans thanks", to messages with transfers. I fled to Citibank.

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Posted

 

Yes you can - complete the form your find here. It costs €7.60 which is deducted from your bank account - they mail you the information by snail mail]

Having found this out I decided to do it. Just for fun. The response came in two days. it was quite interesting.

  • They have my name, address, date and place of birth correct
  • They show my previous residence as being my office address (my family may think I live here, but I never made it official!)
  • They show an Ebay identity check carried out on 23.01.2004 (when I registered as an EBay seller)
  • They show a credit check from a car finance company when I ordered my last new car in May
  • They show an entry without information for my mobile phone provider (only one - I have two mobiles)
  • They show an entry from a previous car leasing company showing the credit I took out, the number of payments and expiry (it expired in August - the lease is now cancelled and the car returned)
  • They show an entry from another previous car leasing company showing the credit I took out, the number of payments and expiry (it expired in June - the lease is now cancelled and the car returned)
  • They show a credit check by the legal department of one of the above car companies on 01.09.2004 (I missed the last payment because I was on vacation - it's since been paid off and I have a letter of apology from the leasing company)
  • There are two entries for credit card accounts from my bank
  • There is one entry for another credit card, from another bank, that I cancelled and returned 2 years ago

Apart from the two (now completed) leasing contracts no financial information is given. The two leasing contracts show total number and amount of monthly payment.

There is no information on any of the other 4 credit cards I have (one with €50.000 credit limit, another unlimited).

There is no information on my mortage (maybe because this is a secured

loan?)

Apart from any negative information that might appear (e.g. if I really didn't pay that last leasing payment), I can't see much value in the information provided as there is very little content which would help someone assess my credit-worthiness.

I was surprised to see the Ebay entry (but recall a SCHUFA check was a condition of signing up)

 

According to the paperwork included I can contest any of the entries or content in writing. The entry will be checked and either revised if in agreement, or a comment added if I request it.

 

YL6

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Posted

 

They have my name, address, date and place of birth correct

possibly because you typed it in because they are mandatory fields on the request web site?

 

one of you, many of us, I make that pimms o'clock old boy

 

(PS: in other words: you type in the fields constituting the primary key, they use it to retrieve related info. had you perhaps been enjoying a refreshing alcoholic beverage before contributing?)

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Posted

hey YL6, thanks for doing that and sharing the info with us.

 

i've done credit checks in the u.s., which btw is something we amercians should do, cause i found out about a credit card i never had, but luckily nothing was ever charged to it, and a bounced check i once had which the bank claimed i never paid. it took months to get that off my record (hey was a college student!).

 

and jordi, thanks too for your insights. now i understand why my bf thinks the way he does. sad that he couldn't see where i was coming from. :(

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Posted

 

they have €100k to put down or they use something as collateral

I can only put that statement down to lack of experience on bf's part - I assume he's never tried asking the bacnk for money to buy a flat?

 

As you know I bought a flat last year and, believe you me, I did not have anything in the region of 100,000 euros up my sleeve and I definately don't have anything as collateral.

 

I only had to put up twenty percent of the value of the property. Now I know prices in Munich are high but 100,000 is a bit OTT, unless of course you intend buying a flat worth half a million!

 

I know a lot of people like to put up 40-50% of the value of the property, but it's not necessary.

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Posted

Absolutely not, I've worked on a few purchases and I always see the mortgage - which can be for 95% of the purchase price. Though never in my entire life until now I have never seen a young couple pay cash for a house - 350k in the bank and transferrable next week - I can only assume they won it or inherited it.

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Posted

ah, i think i meant DM 100k (bf was using an example from a friend who actually did that). yet, the 20% downpayment seems reasonable if you have it. those are common u.s. figures too. surely the more you put down the better.

 

thanks for that guys. i think in some regards, my bf is out of touch with some things. he was surprised at how "cheap" appliances could be, but maybe it's cause his parents only buy miele and they believe you have to pay a lot for quality. :D

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Posted

You're right Jimbo.

 

Elf - I only actually put ten percent of the value of the flat down. The nice little man at the bank theoretically would have given me a 95% mortgage 'but wouldn't advise it' and by twisting an arm or two I came up with enough cash to go for a 90% mortgage.

But I needed the other ten percent on top to cover the tax, Notar fees, Makler fees, etc.

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Posted

 

the more you put down the better

not in a rising market, quite the opposite...

 

say you buy a flat for 100, putting down 10 and borrowing 90. the value goes up by 10%. you now "own" 20 and "owe" 90, doubling the money you put in

 

say you buy a flat for 100, putting down 5 and borrowing 95. the value goes up by 10%. you now "own" 15 and "owe" 95, tripling the money you put in

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Posted (edited)

with arguments like that i can convince my bf of anything. german engineers need facts and figures!

but in general do real estate prices go up in value?

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Posted

How does the German credit rating system work?

 

For example can someone get a phone line if they've got bad schufa rating?

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Posted

jeremy-style question - what the hell is schufa?

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