Control and safety for the SCHUFA scoring method

The supervisory authority competent for SCHUFA has reviewed our scoring method and found that it is reliable as regards data protection regulations. We also are the only credit bureau in Germany that has disclosed its scoring method not only to the competent supervisory authority, but, in 2010, also to the federal data protection officer and the data protection officers of all federal states.

Moreover, the SCHUFA scoring method is on a regular basis reviewed by universities and independent institutes (statistics consulting laboratory of the institute of statistics at the Ludwig-Maximilian University in Munich) and found to be meaningful. Furthermore, the methods used by banks are on a regular basis inspected by the Federal Financial Supervisory Authority (BaFin) as regards their informational value.

Scoring methods: Federal Court of Justice acknowledges that scoring methods are a business secret worthy of protection

Demands are made time and again that credit bureaus should disclose their concrete calculation methods to the public at large. The Federal Court of Justice has ruled in 2014 that the SCHUFA scoring method is a business secret worthy of protection. According to this ruling, the contents protected as a business secret include the general operands such as statistical values, the weighting of individual computation elements for the determination of the probability value and the formation of any reference groups as a basis for score cards.

Good reasons to protect scoring methods

Publicly known scoring methods involve the danger of manipulation aiming to improve score values irrespective of whether the actual creditworthiness is improved, as also shown by a study conducted by professor Akos Rona-Tas and Dr. Stefanie Hiß.

According to that study, there is a connection between publicly known scoring methods and the U.S. housing crisis in which U.S. citizens overcommitted themselves massively through borrowing. In contrast to Germany, there are countless websites in the U.S. that explain how to improve your score. These sites offer score simulations for consumers to check out "what if" scenarios to see which factors can influence their score value without actually changing their creditworthiness.