SCHUFA - the German credit report system

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

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

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.

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.

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.

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.

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.

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...)

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.

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

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?)

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.

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.

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.

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.

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.

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

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?

I'm sorry to ask, but REALLY? If a person had flawless credit, or a bankruptcy, it wouldn't matter? You just start over from zero with no credit history, and have to work your way up from day one all over?

Yes.. Why? You looking to rack-up some debt

Nope, but I do have a bankruptcy in the US due to a horrible divorce... I just assumed I'd not have a car loan or credit card for years to come. Not that I have any want or immediate need for those things, but, it's interesting to hear the answer might not be an instant "NO" if I want to get them.

Only thing I can think of is maybe a credit card... It's easier to rent a car with one, which I do occasionally. Some places (at least in the US) don't let you rent without one. The ones that do only let you do it with a debit card, and usually put a lock/freeze on around $500 US in your checking account. That doesn't make it easy to take a "weekend away" even if you have a fair chunk of cash in the bank.

A big difference between the US and German Debt, is if you default or go bust, Germany will also come after you Husband/wife and Family (If they lived in Germany)
to collect the $$ so be carefull.

They do that in the US too, the laws got dramatically more harsh this last year... They take the house, car, anything they think they can sell, guitars, all the stuff... I got really screwed when my exwife convinced the judge our home was worth $418,000 USD, then I had to take a loan out to pay her off because it woudln't wait until the house sold, and then I tried to sell it on my own and couldn't even get $330,000 for it. The that's when they come around taking all your stuff. Suddenly, I was suppose to have the cash in hand to pay the difference!

Plus the lawyers... Get this, it costs around $1000 minimum just to "go broke." The bill for the process alone can be $2500 easy... So, you have to be in pretty deep to even consider trying to sell enough stuff to just pay the legal bills part of it, which is required before they even start the process of taking your stuff away.

What you get to keep is very small... Clothing (for the most part), and stuff they deem below the effort to sell for cash. They don't take the shirt off your back, but they will take the roof over your head! And if that doesn't cover the bills, they go after your wife, your ex-wife, and anyone that may have ever put their name on a financial agreement with you (business partners, etc...) Oh, but it is different from state to state.

But overall, it stays on your credit report for 10 years, making it extremely difficult to get any sort of credit for the first few years. Then when you do get credit, your paying about double the interest rate anyone else would be.

Yes, it was a bummer for me when I got to Germany and wanted to get a German credit card. In the States I had mail daily from CC companies throwing their cards at me and here I actually had to search and go through this painful process. I guess all those years of excellent credit in the States mean nothing here. Luckily, I have a good job here so it didn't take long to get a CC but, still...

Correct. But bear in mind that no credit record can be as bad as a bad one in some eyes. Without any evidence of a record you may have problems getting credit from anyone else in the early days other than your "house" bank, who I presume are informed of your circumstances and see your income each month...

I grew up in Germany and never heard about "biulding a credit history" before I moved to the US. My brother recently built a house and did have no problem getting the loan without downpayment having a moderate monthly income (he got it from the bank he had been with since he was 16). He also never had a loan before and his SCHUFA records where probably blank (The same for my parents. My father would never get a loan, unless it is for a house). From what my parents told me, to have no credit history is as good as you can get. They alsways told me that I don't want a SCHUFA entry. That is, if you are born in Germany. This is not necessarily true for foreign nationals, however. Here in the US, few credit card companies give you anyithing at all, if you are not a citizen. I would assume that is no different in germany (maybe as a EU citizen it is easier). You might wanna ask your bank about that.

But, yes, I wouldn't expect anyone in Germany to know what "building a credit history" means. I don't even thnk there is a German translation.


The EU is trying to unify the banking sector ... maybe that will improve it. But between Germany and the US nothing goes in either direction. I have heard of fellow students from India here, that take all they can out of their credit card accounts just before they move back to India for good. I would not try that between the US and Germany, though ;-).

The way I always see it is:
- in Germany you want no entries on your credit history.
- in the US you want to have (good) entries, have a high score and build up your credit history.

What this means is:
- in Germany you start out with a good credit history, what you make of it is up to you. If you always pay your bills on time you do not get any entries.
- in the States you have to build one up first before you gain financial credibility. (I had to pay $500 as a security deposit for a 1 year cell phone contract with T-Mobile USA as of course I had no credit history and no SSN as I had never been there previously.)

I just went and paid for a "meinschufa"

So my score is is 99.18 which I guess is pretty good. In my history I can see Ebay and O2 have checked on me no great surprise, and I can see both my German bank accounts. I can't see what stopped me being 100%.

I have necer taken any loans here, and have largely paid bills, except where I reckoned the originisation didn't deserve the money.

The score is not an individual rating of your personal creditworthiness. Its just a forecast, based on the typical behaviour of your peer groups. So maybe you are living in a less than perfect neighborhood, or maybe the irish are generally known for not paying their bills in germany...

Then whats the point of schufa. Some originisation does a credit check on me, and they'll find out what is the risk of a 42 year old Irish man living in the red light district, but no information on all my credit card debt, failed mortgages, and murdered debt collectors?

Or does industry get the real deal, and mein schufa is just a con. In which I'll reverse the charge. What will that do to the system, if I don't pay Schufa's invoice???

You go to Fritz&Co classy Landhaus style kitchens tomorrow and want to get 10K credit for a new kitchen.
With a score of 99% they will lend you the money.
With a score of 60% they wouldn't, or a lot less.

I'm also registered for https://www.meineschufa.de, having been a beta-test user since last year. My rating is 98.93%. During the test phase I queried how I could improve the score and was told 100% is unassailable. "No-one in that good" (they said). It seems people newly registered actually briefly start with 100% and then as soon as data is entered, no matter what it is then the rating will drop on the basis that any business relationship has a risk, albeit maybe miniscule. Don't forget that this rating is personal - only you ever get to see it. A major advantage of "meinschufa" is the ability to query or argue entries online with very little formality. I've successfully done this with a couple of entries which were long expired (but also were not negative) and it improved my rating marginally, so it does seem that quantity of data, no matter that it's non-negative can be detrimental to the rating.

So is Schufa much different than the UK Experian or Equifax report? (never had either so we are unsure)
We need something akin to Equifax to secure a mortgage in Canada (as Mr. 17 currently has no CDN credit history but we are being told that banks will accept Equifax).
Problem is he has been here 7 years and this is where his recent credit history lies.
Based on what people are saying above Schufa will not give us the same kind of info which banks rely on to assess credit risk in other countries?
Is there anything other than Schufa reports which we can get?

Blimeygirl: with some luck you have been registered by "CREDITREFORM", another private institution which reports credit history and available financial data on persons and corporations in Germany. Often, however, the information is not very accurate but it might still help you. According to German privacy rules you are always entitled to receive a copy of any information which is stored about you in their system, therefore try to find the responsible CREDITREFORM office for your area and demand a print of the information. If it is good it might help you, even though you will certainly need a translation into English. Austrian banks are quite happy with Creditreform reports in my experience...

Cheerio

Could someone please clarify whether an O2 query on your SCHUFA will negatively affect your score? My boyfriend and I have been going round and round arguing about Kreditanfrage vs. Konditionenanfrage and he claims the O2 check is neither and won't negatively affect me, but I disagree. I don't have much of a choice in the matter, as the check is imperative if I want a contract, would just appreciate the clarification (especially if I'm right and can say nyah-nyah-nyah to my boyfriend.)

A single query on SCHUFA in general is not harmful.

As far as I have experienced, if you have lots of credit checks in a short time period and are known as a "credit seeker", then this would definiteley be detrimental to your credirt score.

That makes sense. Apart from my single credit card, I've never had any other inquiries on my SCHUFA that I am aware of. But the issue is that I'm planning on applying for a small personal loan in the near future, and I just don't want my chances of obtaining the loan to be damaged just because I also recently had a stupid O2 credit check.

It wont.. Don't worry.. Hell even Ebay runs a SCHUFA check on you when you sign up. Its nothing to worry about.

Thanks very much koorosh & DK!