The ECJ’s Schufa ruling: What does that mean for consumers and the credit market?

The ECJ’s Schufa ruling: What does that mean for consumers and the credit market?

According to a report from www.butenunbinnen.de

In a recent ruling, the European Court of Justice ruled that Schufa information must not be decisive for the creditworthiness of customers. It is questionable how this ruling will affect the market and consumers, but experts assume that the Schufa score could be decisive, especially for cell phone or energy contracts. For banking transactions, however, the effects will probably remain manageable, as banks already rely on other information such as income and assets. Schufa itself is calm and believes that the vast majority of its customers can continue to use the Schufa scores without adjusting their processes.

It is expected that due to the uncertain economic situation, loans will only be granted with particular caution in the next few years. At the same time, demand for loans from households could decline as borrowing costs have risen sharply. Consumers should therefore know their Schufa score and regularly obtain free Schufa reports in order to correct any errors and improve their creditworthiness.

Schufa scoring is based on a scale from 0 to 100 percent and indicates the likelihood that a customer will meet their financial obligations. The higher the score, the higher the creditworthiness. Schufa provides its assessment of creditworthiness to contractual partners before contracts are concluded.

The European Court of Justice's ruling on Schufa scoring could have far-reaching effects on the market and consumers, especially in the area of ​​quick contract conclusions such as cell phone or energy contracts. Consumers should therefore be vigilant and keep an eye on their financial situation to avoid possible negative consequences.