Scoring at SCHUFA

Scoring means drawing up forecasts for the future on the basis of experience from the past.

Credit scoring is all about the question of how probable it is that a person will meet their payments. This is very important information for companies or banks. It provides a data basis to help decide whether to provide credit or purchases on account. Thus reducing the risk of a default.

Without a credit assessment a financial default risk would have to be allocated across all consumers. Many products, services and credit would probably be more expensive – for all of us. Numerous transactions would take much longer. You might have to take out expensive extra credit default insurance for a loan – as is obligatory in some other countries. Convenient payment options such as “purchase on account” online would probably barely exist in the current form. Many online orders would take days to settle – this happens in seconds today.

It’s best to show this using an example. You’re looking for a new TV, you find a good offer in the internet, enter your data in the order form and order on account. However, you won’t just get the TV automatically. Because in the vast majority of cases the provider will check your creditworthiness in advance – for example, with SCHUFA.

We then transmit your SCHUFA-Branchenscore to the company. For example, for banks or retail. This percentage will enable the company to assess how probable it is that you will also pay your invoice. The company will usually combine this figure with its own data as well. For example, are you already a customer there? If yes – have you always paid your invoices correctly so far? This principle works at many companies and also at banks or leasing providers.

Yes. With scoring, credit bureaux have to comply with a lot of legal requirements, including as regulated in the General Data Protection Regulation (GDPR) or the German Data Protection Act (Bundesdatenschutzgesetz, or BDSG).

Important: A person’s scores are only transmitted if the enquiring company has a legitimate interest. For example, this is the case if the intention is to conclude a contract.

In order to become a SCHUFA contractual partner, companies must meet numerous requirements – including those of the General Data Protection Regulation (GDPR). We will check these intensively before admission and connection to SCHUFA.

Generally, SCHUFA stores information about previous consumer payment behaviour and compiles a score figure from this.

In detail, for example, SCHUFA considers whether any credit applications have been made in the past and paid back contractually. Or whether an invoice for ordered goods was paid.

What applies here: The more relevant information that can be analysed, the more precise the score. And the more reliably actual creditworthiness will be depicted. This is also the reason why consumers who properly and correctly pay off credit can have higher scores than people who do not have any credit obligations at all – and about whom there is otherwise no data available.

The score calculation always has to remain partially a business secret so the result is also meaningful. Because if the calculation model were completely open, the score could be manipulated and wouldn’t be worth anything.

Good to know: The competent data protection authority is aware of the formula to calculate the score and the formula is supervised by this authority and independent scientists.

• Hochschule für Technik und Wirtschaft des Saarlandes (Subject area mathematics, engineering)
• Frankfurt University of Applied Sciences; Frankfurt (Subject area computer science)

In addition, all our score calculations are subject to the regulations of the GDPR, the General Data Protection Regulation.