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Three years of poor credit rating—is that fair?

Almost 70 million people in Germany are in the system—and hardly anyone really understands it. SCHUFA collects data, calculates a so-called score from it, and uses this to make decisions about quite a lot: rental apartments, credit cards, installment purchases. Anyone who pays late once quickly has a problem. Even if you have long since paid off your debts, the "blemish" remains—for up to three years.

Now, the Federal Court of Justice (BGH) in Karlsruhe has addressed the question of how long such entries may be stored. The ruling: In principle, everything is legal—but not always.

Poor grades for past mistakes—what is SCHUFA permitted to do?

If you pay a bill late, you will not only get into trouble with the creditor. The SCHUFA credit agency is often informed as well. This information is used to calculate the famous credit score—a value that determines how reliable a person is from an economic perspective.

The problem: even minor oversights—such as a forgotten cell phone bill—can lower your score. And even if you have paid, the entry remains on file for a long time. SCHUFA usually stores such cases for three years. Only in rare cases—such as prompt payment within 100 days—is the entry deleted earlier, namely after 18 months.

What many people don't know is that these storage periods are not regulated by law anywhere. They are so-called "rules of conduct" that SCHUFA has developed in collaboration with data protection authorities and consumer associations. They are voluntary – but have been considered binding up to now.

The Federal Court of Justice brings movement into play

The Federal Court of Justice has now ruled that these rules are acceptable—but not sacrosanct. In plain language: SCHUFA may store data for three years in principle, but each individual case must be considered separately.

If there are special circumstances—such as a one-time financial emergency or proven minor fault—the person concerned can request that the entry be deleted earlier. Prerequisite: Valid reasons must be provided. The judges expressly emphasize that the storage periods must not constitute a rigid law.

This makes it clear that SCHUFA's current practice will remain largely unchanged, but will become more flexible with regard to exceptions.

Who wins—consumers or SCHUFA?

The ruling provides both sides with arguments. For consumers, it offers a glimmer of hope: they are not completely at the mercy of the system, but can defend themselves—provided they have a good reason. For SCHUFA, it is confirmation of its work: the fundamental storage of data over many years has been legally secured.

But anyone familiar with the reality of the situation knows that most people have neither the knowledge nor the means to successfully defend themselves against such entries. Anyone who has found themselves in a difficult situation now has to provide legal proof that their case is a "hardship case." Sounds good on paper—but remains difficult to enforce in practice.

What we say about this

A ruling between law and reality. The Federal Court of Justice makes it clear: SCHUFA may store data—but not without limits. That sounds fair at first glance. But anyone who wants to defend themselves needs strong nerves and often legal assistance. A true balance looks different. In the end, credit checks remain a game in which the rules have been readjusted—but the referee is still called SCHUFA.

Source: tagesschau.de