Schufa, Germany’s leading credit bureau was sued by a German individual concerning the lack of transparency of its credit scoring methods. The plaintiff had been denied credit for a car loan. Schufa had provided the individual with information as required by law, but would not provide the underlying method, which it regards as a trade secret. The case worked its way through lower courts up to the German Supreme Court.
The 6th Civil Senate of the Bundesgerichtshof in Karlsruhe had confirmed that credit reports for consumers meets legal requirements. The German Supreme Court recognizes that the underlying mathematical and statistical calculation method for credit scoring is worth protecting as a trade secret. The Supreme Court hereby affirms the existing case law from similar methods.
SCHUFA is pleased that their special efforts to improve transparency have been recognized by this court ruling. Each consumer receives from SCHUFA information about the underlying data used for the calculation of scores. Schufa provides detailed information on credit scoring and their relative importance for the credit system.
The German Supreme Court ruling is good news for the credit information industry.