What is Schufa, why is it important to have a good Schufa score in Germany?

Credit Score Schufa

Germany is an excellent overseas destination to move to. It has a solid banking and loan system and you are supposed to follow the rules of the land to open an account and get a loan, or even rent an apartment. For this, the nation has a decent credit worthiness rating system, in the form of Schufa.

You need to have a good Schufa score, to prove that you have a fine  credit background, in terms of creditworthiness, and that you would easily pay your loans, and give rent on time.

What’s Schufa?

It’s basically the credit rating agency of the country. It stands for Schutzgemeinschaft für allgemeine Kreditsicherung. It means “general credit protection agency.” It gives a credit score, called the Schufa score, to the residents of the country. This is done by SCHUFA Holding AG, a private company, which tracks and keeps credit records of the citizens. If you have a decent Schufa score, you can easily find an apartment, and/or get a loan in the nation. But, if your Schufa score isn’t a good one, some banks won’t allow you to even open an account with them. -Looking to rent an apartment? the landlord will ask for your Schufa report. -Applying for a loan? Want to buy a house? A car perhaps? Schufa report required. -Getting a connection from Deutsche Telecom? They will want the schufa report. Order yours here.

What’s Schufa Score?

Also known as credit score, Schufa score is a measurement of how dependably you’ve fulfilled your financial requirements earlier, like, for instance, utility bills and credit card payments. It’s employed to decide how worthy you are of being given new obligations, such as personal credit loans.

How can I get a Schufa report?

Every German resident qualifies to receive a free Schufa report, once a year. This can be ordered on the official website under the category Datenkopie. If you upload a copy of your passport and your Meldebescheinigung, then this will assist them in identifying you faster and shorten the process. This report, once ready, would be sent by mail to you, in a few days. Please note that this report is only for your reference, and not for handing out to your landlords etc, as this report is not a detailed one, only an overview. The majority of the landlords, are looking for the paid version of the Schufa report, as this is far more detailed than the free version and includes certification. This can be ordered on the official website under the category BonitätsAuskunft. The report, again once prepared, is sent off to you via mail in a few days.

Why is it crucial?

As mentioned earlier, banks in the nation normally check your score when you want to open an account, unless you want an account for which having the Schufa minimum isn’t required. Your bank also checks your creditworthiness (or the lack of it) when you submit an application for a loan, and your Schufa can decide how much interest you may have to give for that specific loan. The more the risk for the bank, the more the rates of interest the bank may charge. Phone and internet providers also check when you show an interest in creating a new contract, and, importantly, landlords and property managers will always look for it when you submit an application to rent a flat. These companies check your Schufa to know if you have any unpaid debts, and if they may really have faith in you–either as a customer or tenant.

Schufa score

Above 97.5% – Extremely low risk 95-97.5 %- Low to negligible risk 90-95% – Satisfactory upto increased risk 80-90 % – Significant upto high risk 50-80% – Very high risk Under 50% – Critical risk cshow

How can I make my Schufa score better?

Against this background, it’s important to have a good Schufa score. You need to have a decent SCHUFA score (more than 95%). Although you may not be able to improve your SCHUFA score suddenly, still, you can make your creditworthiness better over time, if you follow the below-given tips.
  1. To begin with, don’t open numerous bank accounts in different banks. Terminate all bank accounts you don’t require anymore. If you have many accounts, SCHUFA will rate it negatively. Also, don’t switch bank accounts too frequently. Besides, in case it’s possible, make an effort to keep a healthy reserve in the accounts you have.
  2. Repay all your credit loans and shut them properly. Even if they have zero balance they count: close them to make your score better.
  3. Delete all incorrect SCHUFA entries. Go through your SCHUFA report and look out for all outdated or incorrect entries. It’s vital that SCHUFA corrects such entries without any delays and deletes them from your file, if required.
  4. Limit the number of needless (German) credit cards you may have. SCHUFA would appraise the possession of more than two credit cards in a negative way and think that your financial state isn’t good and consequently you have various cards.
  5. Annul every pointless and dated contract, for instance, phone contracts, where you pay to get the phone, as this is regarded as a debt. Terminate all old contracts that you don’t require anymore.
  6. Consolidate small loans. In case you have quite a few small loans, consolidate them to make one larger loan.

What happens if I don’t have Schufa and I want to rent an apartment?

In order to rent an unfurnished apartment, a SCHUFA is regarded as compulsory, and minus this, you may not get a lease. But don’t worry-you have an alternative in furnished apartments. Time and again, these are presented as holiday accommodation, and typically planned to be used for a shorter duration of time.


Schufa is the credit rating agency in Germany. It gives you a score on the basis of your creditworthiness. If you have a good score, you would have little or no difficulty in finding an apartment, and/or getting a loan in the country. But, if your Schufa score isn’t healthy, you would have plenty of issues in even opening an account in nearly all German banks. Here’s a related video on YouTube: What is Schufa Thumbnail
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