It probably didn’t take long until you heard about the SCHUFA after your move to Germany. It has a tremendous impact on all our daily lives, Germans, and expats alike. This article explains what it is, how to get SCHUFA, and how to stay on the good side of things.
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What is SCHUFA?
SCHUFA stands for Schutzgemeinschaft für allgemeine Kreditsicherung (General credit protection agency), and the SCHUFA Holding AG (the biggest private credit tracking agency in Germany) tracks and rates your payment behavior and issues the report.
So if someone, like your landlord or bank, is asking you to provide a SCHUFA record, they check how trustworthy you are to pay your bills on time. This report shows all companies you have purchased from who previously enquired about your solvency with the SCHUFA.
You automatically start your SCHUFA record by registering your address. When you open a bank account, get internet for your flat, or get a mobile phone contract, the providers inquire with the SCHUFA each time before accepting you as a customer and thus leave a record.
The system is designed that your employment status or income does not influence the score, instead only your trustworthiness towards bills, contracts, loans, and other liabilities. The world’s wealthiest person could not open a bank account or get a credit card in Germany, with a bad SCHUFA score.
How to get a SCHUFA report in Germany?
There are four different ways to get your SCHUFA score and report; each one fulfills a different direct need.
1. How to get a SCHUFA report for free?
Every German resident is legally entitled to receive one free SCHUFA record per year, to see what data is being stored. You can request it on the official website, and it is called Datenkopie (data copy). Click on ‘Jetzt bestellen’ in the right column and enter your personal information on the next page.
You can upload a copy of your passport and your Meldebescheinigung (the paper from your registration) to help them identify you faster and avoid further queries. They will send you your free report via snail mail a few days later. This report is meant only for you and not to hand over to third parties, e.g., your future landlord, when apartment hunting.
2. How to get a SCHUFA report for landlords?
While the free report gives you an overview of what data is stored, it does not show you all details. To rent an apartment, a lot of landlords request the paid version of your SCHUFA report, with an official certificate that reveals every detail.
You can also order it on the official website, and it is called SCHUFA-BonitätsAuskunft (Bonität means solvency). Again click on ‘Jetzt bestellen’ at the bottom and enter your data on the following pages. This report costs 29,95 euros and will also be sent to you via snail mail in the next days. Here is an example of a SCHUFA-BonitätsAuskunft.
3. How to get a credit report on the same day?
What if you can’t wait a few days for the snail mail to arrive because you have the visiting appointment for your new dream flat tonight? Head to your closest Postbank branch and request a SCHUFA-BonitätsAuskunft at the terminal until one hour before the end of their opening hours.
You can find the closest branch on their branch finder website. Bring your passport and Meldebescheinigung. The cost of 29,95 euros gets collected via direct debit from your bank account. You do not need to have an account with Postbank to use that service.
4. How to get a SCHUFA report immediately?
If you are in a real rush, you also have the option to get your SCHUFA-BonitätsCheck within five minutes online. This brings you the official certificate, which is valid proof to give to landlords; however, it does not give you all the details like the SCHUFA-BonitätsAuskunft. It still costs 29,95 euros, but you have the benefit of receiving it via e-mail five minutes later. So you can either print it or e-mail it to your possible future landlord.
What is a good SCHUFA score?
A very good SCHUFA score is 97% and higher and a good score has a minimum of 95%.
The Basisscore, the one you start with at the beginning, is 100%. In case you don’t pay your bills on time, the score drops lower. Here is an overview of what risk you portray of not meeting your liabilities properly.
How to improve your credit score?
To improve your SCHUFA score, you can do the following 9 things:
- Avoiding late payments automatically improves your score
- Avoid having too many bank accounts, especially inactive ones
- Don’t change your bank account too often
- Don’t zero out your bank account, but try to keep a healthy balance
- Don’t have too many credit cards and cancel those you don’t use
- Consolidate your loans. One loan has less impact on your score than many smaller loans
- Regularly check your SCHUFA score via the free version once a year. In case you find a wrong record, you can officially object and ask for the record to be deleted.
- Solve a matter that harms your score as soon as possible and ask the company or creditor to withdraw their SCHUFA statement
- Don’t move too many times, as this can impact your score negatively
How to find an apartment without a SCHUFA
Expats often face the challenge of needing a SCHUFA to show their potential landlord but not having one yet, because they are not registered yet. This is a typical chicken & egg situation. There are three ways to solve this challenge:
- Get a flat for the first few months from a furnished flat provider like Housing Anywhere, which does not require a credit score and allows you to register with it. That way, you can start settling in, set up the first services, get to know the different neighborhoods of your new home, and hunt for a more permanent apartment in person.
- If Housing Anywhere is not your thing, you can also look for a flatshare (WG short for Wohngemeinschaft).
- You can also try to look for flats that don’t require a SCHUFA. Some landlords are fine with just getting the deposit or a recent bank statement to prove your liquidity.
Related Guide: Renting In Germany [A Detailed Guide For Expats]
The SCHUFA needs to be your friend, whether you like it or not. It tracks and rates your payment behavior and therefore impacts whether you will be able to get a loan, a mobile phone contract, or that new TV that you want to pay in installments. To rent an apartment, a landlord commonly asks you to present your SCHUFA report to prove your good payment history. You can get your report online or at a Postbank branch for 29,95 euros.
Happy bill paying!
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