How can I improve my SCHUFA score?

You rarely can improve your SCHUFA score overnight. But you can take some basic steps to help improve your creditworthiness over time if you follow these tips.

  • Repay your credit loans and close them. Even if they have zero balance they count: closing them improves your score. 

  • Delete incorrect SCHUFA entries. Check your SCHUFA report for outdated or incorrect entries. SCHUFA must correct such entries as soon as possible and delete them from your file if necessary.  

  • Cancel unnecessary (German) credit cards. Apparently, SCHUFA evaluates the possession of more than two credit cards negatively, as it is assumed that you might have financial problems and only, therefore, have several cards.

  • Cancel bank accounts you don't need. SCHUFA apparently rates a larger number of bank accounts negatively.

  • Cancel unnecessary and outdated contracts. Examples are phone contracts where you pay for the acquisition of the phone, as this is regarded as a debt.  You should cancel old contracts that you no longer need. 

  • Consolidate small loans. If you have several small loans, it's better to consolidate them into one larger loan.

And here are a few tips on how to keep your good SCHUFA score. Keep in mind that it is easy to ruin your score and hard to build it up:

  • Pay your bills and installments on time. Not paying bills is the sure way to kill your score. Not every bill that you pay late will be recorded directly in your SCHUFA file, and in case of doubt, you may need to consult a lawyer. Only after two written reminders, with at least four weeks between them, may a creditor inform SCHUFA about the late payment. But be aware that e.g. the phone provider will cancel your loan and informs SCHUFA about the termination of services. This will then surely be counted by SCHUFA.

  • Don't add to your credit loan balances. Every increase is reported. Instead, make additional payments to reduce your balance.

  • Avoid credit requests. Make condition requests (“Konditionsanfrage”) instead of credit requests (“Kreditanfrage”). Many credit requests in a short period are evaluated negatively by the SCHUFA because it assumes that the applicant has problems getting credit. If you want to compare the credit conditions of different banks, you should make sure that condition requests are made. These will not harm your SCHUFA score. Outright rejections of credit requests are a sure way to undermine your credit standing.

  • Don't take out too many small loans. Taking out loans, even for small amounts, hurt your SCHUFA score. Repaying them improves your score. Indeed, getting a small loan and then repaying it can actually improve your score over time, but be careful with this strategy.  

  • Don't exceed your overdraft. Having an overdraft facility can increase your SCHUFA score because the bank considers you creditworthy. However, if you regularly exceed your overdraft, this will hurt your SCHUFA. 

  • Avoid frequent bank account changes. SCHUFA rates frequent account changes negatively. 

  • Protect yourself from the misuse of your data by fraudsters. Unfortunately, it is becoming increasingly common for criminals to go shopping online with a stolen identity. Open bills are not paid, and corresponding collecting procedures worsen the SCHUFA score of the identity theft victim. As soon as you notice that your identity has already been misused, you should report it to SCHUFA free of charge and have your data cleansed.

We recommend that you obtain a SCHUFA report before applying for a mortgage. You can order it online at meineSchufa.de. You can either order the free data copy (Datenkopie nach Art. 15 DSGVO) or the paid version, the "SCHUFA BonitätsAuskunft". It costs 29.95 euros and can also be printed out at designated Postbank and Volksbank branches. The data copy will be sent to you by mail, which may take a few days. 

Please note: The online version of the "SCHUFA BonitätsAuskunft" which you can get on Immoscout, for example, is not suitable for checking your creditworthiness, as it does not contain information on the industry scores that are important for banks. 

The free data copy is actually the most elaborate and can help you understand best how your credit score has evolved. 

In any case, once you have received your SCHUFA report, you should check whether there are any old or incorrect entries. These can become a problem and, for example, lead to the rejection of your mortgage application or worsen the conditions. If you find incorrect entries, you should have them corrected. 

Reading Tip: These Criteria Affect Your Creditworthiness

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