ECJ rules: Schufa information is not the only decisive factor

ECJ rules: Schufa information is not the only decisive factor

The European Court of Justice has ruled in a ruling that Schufa information alone cannot determine a person's creditworthiness. Annabel Oelmann, director of the Bremen consumer advice center, welcomes this ruling as a step towards strengthening consumer rights. She emphasizes that companies now have to meet higher transparency requirements, especially when assessing contract conclusions.

In practice, this means that the decision by banks to determine lending primarily based on the Schufa value is viewed by the European Court of Justice as an inadmissible automated decision. The ECJ's decision in Luxembourg came in response to questions from the Wiesbaden Administrative Court.

Schufa plays a central role in various financial transactions, including applying for loans, renting apartments or purchasing real estate. By checking a person's creditworthiness and transmitting the score to companies, Schufa provides an assessment of how reliably consumers meet their payment obligations. The ECJ ruling also affected Schufa's practice of storing discharges of residual debts after personal insolvency have been completed for longer than stipulated in the official insolvency register.

The decision of the European Court of Justice therefore has far-reaching consequences for the use of Schufa information and underlines the importance of transparent and fair procedures when assessing consumers' creditworthiness.