Good news for consumers
Schufa removes flaws in credit ratings more quickly
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Credit is primarily given to those who have proven themselves to be reliable debtors. A worse Schufa rating is rather unfavorable. Now consumers can get rid of such credit issues more quickly.
Defaulting consumers will be able to get rid of a negative Schufa entry more quickly in the future. In the event of a one-time late payment, such data will be automatically deleted after 18 months from January 1, 2025 and not after 36 months. However, the prerequisite for this reduction is, among other things, that the unpaid invoice is paid within 100 days of a reminder sent to the credit agency.
“The new regulation of the storage periods offers advantages for both sides: It offers consumers who quickly make up for missed payments the chance to improve their credit rating more quickly,” explained the CEO of Schufa Holding AG, Tanja Birkholz. “Companies also benefit from this because they can get their money more quickly.”
Poor credit ratings can make loans more expensive
Schufa uses huge amounts of data to calculate how reliably consumers pay bills or repay a loan. Such creditworthiness information is important for banks, mail order companies, energy suppliers or mobile phone companies who inquire about the creditworthiness of their customers from Schufa and other credit agencies before contracts are concluded.
Anyone who has a negative Schufa entry may only find out about this if there are problems when concluding a new loan agreement. For example, there is a negative entry if invoices have not been paid even after repeated reminders.
Schufa: Tens of thousands of consumers benefit from the new regulation
Based on the new 100-day rule, consumers can show more quickly that they are not fundamentally insolvent. However, it is also crucial that no further negative data about the respective consumer is reported to Schufa during the storage period, which has been shortened to 18 months. In addition, no information from the list of debtors or from insolvency notices may be available.
For settled payment problems that were reported to Schufa before January 1, 2025 and that meet all the requirements, the credit agency is in the process of deleting these from its database. This affects around 60,000 people and therefore one percent of those with negative Schufa entries. According to the credit agency’s current estimates, another 60,000 consumers can benefit from the new 100-day rule.
Critics are calling for even more transparency
In total, Schufa currently has information on 68 million people in Germany: for example, whether there are current loans and how many checking accounts or credit cards someone has. From all of this, a so-called basic score is calculated. On a scale of 0 to 100 percent, this describes the probability with which a consumer will meet financial obligations. The higher the score, the higher the creditworthiness.
The fact that Schufa does not disclose in detail how the score is calculated exactly causes criticism. Schufa justifies its reluctance by saying that the score could be manipulated if the calculation model were completely transparent.
Consumers can have Schufa send them a copy of their individual basic score by post free of charge. Anyone who registers with the Schufa subsidiary Bonify’s app will also find the score there. Since January 2024, Schufa negative entries have also been visible in the app, if any.
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dpa
Source: Stern