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A bad Schufa score can make it difficult to access credit, without which you could slip even deeper into the financial swamp. How this can be prevented.
Munich – A loan can be a solution for many people to get out of financial difficulties. By spreading the costs over a longer period of time, any payment difficulties can be eliminated. However, it can happen that people who have already had financial problems in the past do not receive a loan from the bank. This can be due to a bad Schufa score. So how can you escape this financial trap?
What the Schufa score means for accounts, credit cards and mobile phone contracts
The Schufa score is designed to help banks and companies assess their customers’ ability to pay. The consumer advice center explains in a statement: “The alleged risk of a consumer is calculated by assigning them to a comparison group with identical characteristics.” In the past, consumer advocates have often criticized this process as being opaque.
The relevant characteristics include the number of accounts, credit cards and mobile phone contracts, current loans, their term and the number of mail order accounts and changes of residence. A Klarna account can also influence the Schufa score. Factors such as place of residence, occupation, income, gender, age and marital status, however, should not be among the decisive data. A Schufa score of 100 points is possible. Schufa divides consumers into five categories:
- Unsatisfactory (up to 29.99 percent)
- Sufficient (up to 85.88 percent)
- Acceptable (up to 93.53 percent)
- Good (up to 97.21 percent)
- Excellent (from 97.22 percent)
You can find out what your creditworthiness is like by looking at your mobile phone: Schufa information is also available via app. In the summer, the company warned of a nasty scam that offers fake services in the name of Schufa.
Expert critical of Schufa score: “Has the greatest influence on the everyday life of consumers”
According to Stephanie Pallasch from Stiftung Warentest, three quarters of all people stored are assigned to the best class. She explains in an interview: “First of all, it is important to know that there are other credit agencies besides Schufa. However, Schufa is the one with the most stored data and therefore has the greatest influence on the everyday lives of consumers.”
A bad Schufa score can make financial difficulties even worse. Based on the data, those affected cannot get a loan from the bank. (Symbolic photo) © Imago
According to experts, the Schufa score should not be the only reason for a business decision. Companies may only use the score as one of several sources. This is also the result of a ruling by the European Court of Justice. However, with a bad score, many consumers could expect worse contract conditions.
Advice from an expert: How to avoid a bad Schufa score
The expert also gives tips on how to avoid a bad Schufa score: “It is fundamentally important that you do not have a negative Schufa entry – for example due to unpaid bills.” In addition, the data should always be up to date. “If an outstanding debt is settled at some point, a current account is closed or an installment loan is paid off, the corresponding entries should no longer appear in the Schufa.”
Those affected should also consider whether they need redundant checking accounts and credit cards. “One or two still have a positive effect on the score, but more of them have the opposite effect.” The longer a business relationship exists, the better the effect on the score. However, the score “cannot be actively manipulated,” says Pallasch.
Is a Schufa score of 100 even achievable?
So far, there has apparently not been a score of 100. This would mean that a person with a flawless history will certainly be able to pay all bills in the future. However, an unexpected default can never be completely ruled out, which is why the best score is not achieved.
