I want to talk about the situation some are facing and that is their application is declined.
Background: Germany has the strongest rules of any Euro country. This applies to banking, credit, financing, tax, mobile/ landline contracts and much more.
The Germans are interested in risk assessment. That means they have a vetting system to make sure there is minimal risk of default. The German providers takes this very seriously.
Part of the risk assessment looks into any negative entries in the SCHUFA (More about this later)
Other considerations are as follows:
Rented accommodation or Mortgaged accommodation.
How long in the place of residence? Moving often can be seen a negative.
Employed, Unemployed, on a Pension. This is to check if the applicant has enough income to complete the contract.
Status: is the applicant German or form another country.
Is the application for the European union of out side the EU. This is used to make sure you’re going to stay in Germany until the end of the contract at the very least. Some of you new to Germany may not have a SCHUFA entry. This often causes problems in the short term.
Previous mobile contracts if concluded in a timely manner this is positive.
Debts. All debts are considered so that the customer can pay the invoices and to make sure the applicant isn’t taking on too much debit. Any defaults are negative.
Banking : Has the applicant got a German bank account. Has the applicant got a German credit card
*SCHUFA: This is important in Germany without a positive SCHUFA entry nothing works here.
When people move to Germany and the have a permeant German address and a bank account a new SCHUFA record is created. This starts at 100 percent. The score changes over time with new contracts, new debits, changes to financing, Changes to accommodation and so on.
The score is updated every 3 months The important thing is the SCHUFA score must be above 95 Percent on average. (This depends on the companies’ internal credit score.)
Please note all companies received a live SCHUFA score specially for certain groups for example Mobile Contracts, Banks. Each has a different sore. The Mobile companies looks at the live score plus other data they hold from other sources.
What next ?
Obtain a copy of your SCHUFA base score for free. You can apply to have a basic copy of your SCHUFA entry for free. This will help you find out problems such as outdated contracts, incorrect entries, defaults.
Here is the link for you. (Use Google translate as the information is in German ) select FREE version.
Data copy according to Art. 15 GDPR - meineSCHUFA.de
- credit reference agency
