In its current form, the Schufa score is not compatible with EU law. This emerges from an expert opinion, which the ECJ usually follows. Furthermore, Schufa is not allowed to store data beyond the periods stipulated by insolvency courts.
For many, the Schufa scoring is both: a closed book and a thorn in the side. The business model of Schufa: A credit agency about the creditworthiness of Germans. This is done by collecting data and the company is now threatened with a severe cut. In a dispute before the administrative court in Wiesbaden, the ECJ was appealed to and the expert opinion found that the Schufa score violates European law. The collection and storage of data is also criticized.
In Germany, several procedures are running against the Schufa; the Wiesbaden judges turned to the ECJ, whose verdict is expected in a few months. However, the report, which the ECJ judges usually follow, already makes it clear that Schufa has to change its processes. Schufa is no longer allowed to automatically distribute the data for creating scores, as this has legal consequences for those affected and violates EU regulations. The automatically determined score is therefore an automated decision that is not compatible with EU law. If it stays that way, Schufa will have to change its score creation.
It is also criticized that the Schufa stores insolvencies forever. According to the report, Schufa must also comply with the statutory deadlines, which stipulate that insolvency courts delete the information made public after 6 months. The Schufa must also follow this. Because the purpose of the deletion is to ensure that those affected do not have a bad credit rating for the rest of their lives and are therefore economically restricted.
Patience is required for now. The opinion of ECJ Advocate General Priit Pikamäe is now going to the court and will be evaluated there. If there are no surprises, the opinion should be followed and the German courts must follow suit in their cases. The Schufa could only stick to the system if the creditworthiness and the score are no longer determined automatically. A decision is final for all credit agencies.
The disputes with the Schufa are usually based on the fact that those affected complain about their score and demand the deletion of data. However, since the collection of the score is a business secret and therefore not very transparent, the topic is regularly dealt with by the German courts. The creditworthiness depends, among other things, on whether and on what terms you get credit agreements, can conclude a contract or receive goods on account. In the case of telecommunications contracts, for example, the Schufa score of the applicant is usually always requested.