The SCHUFA (credit investigation company) is one of the mysterious companies in Germany. Almost everyone has heard of it at some point, but only few know what the SCHUFA exactly does and what it knows.
It is typical that one finds the name SCHUFA within the small print of lease contracts, instalment purchases, mobile phone contracts or when opening a current account.
With one’s signature, one agrees that data can be retrieved from the SCHUFA and also be forwarded to the SCHUFA.
And this is exactly what the SCHUFA does: it collects information about people and provides this data to interested companies. That is why it is called a credit agency.
The SCHUFA is the largest German credit valuation company
SCHUFA evaluates the creditworthiness
However, the SCHUFA is not interested in all data: for itself and the requesting companies, it is about the creditworthiness of potential customers in order to protect themselves from credit failures. By the way, this concern is the reason for the name SCHUFA, which dates back to the “Schutzgemeinschaft für Absatzfinanzierung” (protective association for sales financing) that was founded in 1927.
Accordingly, the SCHUFA primarily collects data through contracts that are relevant for the payment performance.
Depending on the SCHUFA-estimates on your creditworthiness, this can determine, for example, whether a bank will not open a current account with credit card or how much interest you have to pay for a loan. The higher the risk for the bank, the sparse and more expensive are the benefits for you as a customer.
SCHUFA-data is not free from error
In general, you do not get to know what the SCHUFA says about you to a company. In a perfect world in which everything is completely legitimate, you would not need to worry about this, but the world is not perfect.
People make mistakes. Therefore, it also happens that the SCHUFA has outdated and wrong information and forwards it. If you consider that important financial decisions depend on this information, it can be exasperating. For this reason, it is useful to review the SCHUFA data.
You have a right to know what data about you is stored at the SCHUFA. You also have the right that erroneous entries will be corrected. This is controlled by the German federal data protection act.
SCHUFA-report for free
Data is the asset of the SCHUFA, and this, of course, is not revealed reluctantly for free. It is therefore understandable that the SCHUFA offers a comfortable, fee-based access to their data for all citizens and advertises for this.
However, fact is that the federal data protection act determines that you can request a free written information of all your data once a year. The SCHUFA must grant you this free information. How this exactly works and how the information looks like, will be shown in the second part of this article.
Check the data stored about you!
Have you already made interesting or surprising experiences with the SCHUFA? Then please write a comment about it!
Image source: Schufa’s press service