By Dr. Thomas Schulte, lawyer and expert in data protection, banking, and SCHUFA law
In recent months, the debate surrounding SCHUFA Holding AG has reignited, triggered by two significant and high-profile court rulings. The rulings of the Higher Regional Court of Cologne (OLG Köln) and the Regional Court of Bamberg (LG Bamberg) bring a breath of fresh air to the legal dispute over creditworthiness, data protection, and consumer protection. In both cases, common but highly controversial practices of SCHUFA (a German credit bureau) were put to the test – with far-reaching consequences for the citizens affected.
As an experienced lawyer and long-standing advisor in numerous SCHUFA cases, I would like to not only explain the two rulings, but also put them into context: What do these decisions mean for everyday practice, for consumer rights, and for future court proceedings? The following explanations show that it is time to question the power of credit agencies – and, in case of doubt, to take legal action against them.
Judgment of the Higher Regional Court of Cologne: Paid is paid – and must be deleted
The judgment of the Higher Regional Court of Cologne of April 10, 2025 (Ref. 6 U 21/24) could be described as a milestone in SCHUFA law. The court clarified that paid claims may no longer be stored for three years, as was previously common practice at SCHUFA. The judges referred to the so-called “right to be forgotten” under Article 17 of the General Data Protection Regulation (GDPR) – a right that is becoming increasingly important in the digital age.
Special feature of the case: The plaintiff had settled a claim, but the entry at SCHUFA remained – despite payment. Only through legal action and enforcement by the courts was it possible to have the entry deleted. But the court went one step further: it awarded the plaintiff $500 in non-pecuniary damages – and that is remarkable.
This decision sends a clear signal: consumer rights are being taken more seriously. Data cannot simply be stored “as a precaution” or “for security reasons” if there is no longer any current need to do so.
My advice: Anyone who has paid a claim and still has a SCHUFA entry should immediately apply for it to be deleted. If this is rejected or ignored, it is advisable to consult a specialist lawyer immediately.
Bamberg Regional Court ruling: Algorithms under suspicion – scoring unlawful
An equally controversial ruling was handed down by the Bamberg Regional Court on March 26, 2025 (Ref. 2 O 17/24). The court’s central finding: Fully automated credit rating – known as scoring – violates applicable data protection law.
The court made it clear that SCHUFA’s practice of calculating credit scores based on non-transparent algorithms and then passing these scores on to banks, mobile phone providers, and landlords is not compatible with Art. 22 GDPR. This article prohibits decisions with legal effect from being based solely on automated processing – without human review and without comprehensible justification.
Specific case: The plaintiff had challenged a negative score that had led to the rejection of a loan application. Neither he nor his lawyer could understand how this score had been arrived at. The Bamberg Regional Court ruled in his favor and awarded him $1,000 in damages.
Why is this so important? Because millions of people in Germany are assessed on the basis of such scores – without knowing how these assessments are made. If you don’t know why your score is poor, you can’t defend yourself. This contradicts the principle of transparency and fairness.
The consequences: What consumers now need to know and do
The two rulings shine a harsh light on a system that has previously offered little insight. SCHUFA and other credit agencies have been operating for decades as silent authorities on creditworthiness – but the mechanisms behind their decisions are often neither understandable nor legally transparent.
The most important findings for consumers:
- Paid claims must be deleted immediately. A three-year storage period is no longer tenable.
- Automated scoring is non-transparent and legally contestable. A human decision-maker is required.
- Entries without a contractual relationship or based on false identities are contestable.
- Those affected are entitled to compensation. Not only deletion, but also compensation for immaterial damages.
- Legal support is worthwhile. Without competent legal assistance, many unlawful entries remain in place.
The consequences of these rulings are far-reaching—also for the practice of the law firm Dr. Thomas Schulte. More and more often, clients are turning to us with cases in which SCHUFA has stored data without sufficient verification. Our experience shows that a consistent, well-founded approach leads to success—even against large institutions such as SCHUFA Holding AG.
My conclusion as a lawyer: Every entry must be verifiable – otherwise the system is not viable.
As someone who has been advising clients on creditworthiness, data protection, and financial transparency for over two decades, I say this clearly: the current development is long overdue. It is high time that consumers‘ rights vis-à-vis credit agencies are strengthened. The judgments mentioned are only the beginning of a long-overdue debate about power, transparency, and accountability.
If you are affected, do not hesitate:
- Request your free SCHUFA (credit bureau) self-disclosure in accordance with Section 34 BDSG (German data protection act).
- Check your entries critically. Even small inaccuracies can have major consequences.
- Have unclear, incorrect, or outdated entries checked by a lawyer.
- Consult an experienced lawyer before dealing with SCHUFA.
📌 Further information can be found on my website: www.dr-schulte.de
📞 Contact us directly for a free initial assessment of your case: www.dr-schulte.de/kontakt
➡️ Act now before a blacklist entry affects your future. Your credit rating is not a matter of chance – it is your right!