What is SCHUFA?

What is SCHUFA?

You might be opening up a bank account in Berlin and be confused by the name SCHUFA. Worry no more! We are here. SCHUFA (Schutzgemeinschaft für allgemeine Kreditsicherung) is a general credit protection association in Germany. This association was set up in 1927. The company not only offers electricity to homeowners but also gives loans. It is the leading credit bureau in Germany.

Do you have register with SCHUFA?

No, you don’t, once you open a bank account, a SCHUFA account is automatically opened for you. After that SCHUFA will start collect and recording information about you.

Who needs SCHUFA and why do they need it?

Everyone needs SCHUFA; it determines how much interest you will be charged when you request for a loan. If you are not a debt committed person you will pay more interest because of the risk, you’ll put the bank through. However, if you pay your debts and in time then everything will be easy and smooth for you.

SCHUFA is important to everyone, it makes you pay your debts on time making your responsible and the same time reduces risks to the loan givers.

Credit score

The credit score is how one has been able to meet their financial obligations like credit payments and utility bills. This credit score is used to make your credit report which will determine whether you are worthy of being granted other commitments like credit loans. Whenever you open an account you already have a credit score online; they check if you have unpaid debts anywhere even in rents.

What determines your credit score?

Simple, how early do you pay your bills? Do you stay for long with debts? That is what will determine your credit score. Your credit score from your home country will not determine your credit score in Germany. Once you move into Germany and open a bank account, the credit score begins. It is advisable not to open too many bank accounts and have too many credit cards and do not switch bank accounts so often.

SCHUFA credit report

The SCHUFA credit report, contain valuable information about one’s creditworthiness. How you pay back your credit, whether you abuse your credit card and the outstanding credit.

This report is made of two parts;

  • A short report, it is used to prove how economically reliable you are.
  • A comprehensive report on all the data about you, this one is about yourself, here your private work is protected.

When is the SCHUFA credit report needed?


The SCHUFA credit report is used to prove your credit reliability when applying for a loan, opening a bank account or you want to rent a flat.

The SCHUFA record is also used in company reports in businesses before concluding a contract.

Your savings and yearly income are not determined by your SCHUFA credit report; you can be a billionaire but still, have a terrible SCHUFA credit report.

It is important to be responsible in German; all your transactions are tracked and recorded. When you will be stranded your actions will have the consequences then.

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