Credit scoring in Germany vs the US: SCHUFA and FICO explained

Credit scoring in Germany vs the US: SCHUFA and FICO explained

One number decides whether you get the apartment, the car loan and the credit card. The trouble is that the number means something different on each side of the Atlantic. A FICO score is a three-digit product computed by a private company from files held by three competing agencies, and it is designed to be watched and improved. A SCHUFA score is a percentage that says how likely you are to pay, and it is one input into a decision your bank makes with its own model.

Move between the two systems and old habits misfire. Americans in Germany keep looking for a score to optimise that does not exist in that form. Germans in the US assume their clean payment history speaks for itself and are surprised that nobody can see it.

Two scales, two different jobs

The FICO score runs from 300 to 850, higher is better, and the median American sits somewhere around 715. It is not the only score in the country: VantageScore is a competing model on the same 300 to 850 scale, and FICO itself sells several versions plus industry-specific scores for auto lending and credit cards. Lenders choose which one they buy, which is why two honest answers to "what is my score" can differ by thirty points.

The German score is a percentage. It expresses the statistical probability that you will meet your obligations, so 98% is excellent and 85% is not, and SCHUFA publishes different versions of it depending on the question being asked. A bank assessing a mortgage, an instalment loan or a current account may see a different value from the same data. On top of that, most German lenders combine the SCHUFA information with their own internal scoring and with the income and account data you hand them directly, so the final decision was never a single number.

What a FICO score is made of is public. Payment history carries 35% of the weight, the amounts you owe 30%, the length of your credit history 15%, new credit 10% and the mix of credit types the last 10%.