Restricted use of the Schufa credit rating by banks and companies
The European Court of Justice (ECJ) has restricted the use of the Schufa credit rating system by banks and companies. The European Court of Justice (ECJ) ruled in Luxembourg on Thursday that Schufa's so-called scoring is only permissible under certain conditions.
This mathematical-statistical procedure is to be regarded as an automated decision in individual cases, which is generally prohibited by the European General Data Protection Regulation (GDPR), should the credit score be decisive for Schufa customers, such as banks, when granting loans. The court thus largely follows the opinion of ECJ Advocate General Priit Pikamäe from March.
According to the ruling, the ball is now in the court of Wiesbaden. It is to assess whether the German Data Protection Act contains a valid exception to this prohibition. If this is the case, the court must also examine whether the general requirements for data processing set out in the European Data Protection Regulation are met.
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The restriction by the ECJ means that banks and companies can only use Schufa's credit rating under specific conditions, potentially affecting their loan approval decisions. This judgment could impact a company's credit rating if Schufa's scoring is crucial for accessing bank credit. Eugh, the complexity of navigating these judgment calls regarding data protection and credit utilization is something banks and companies must now grapple with.
Source: www.ntv.de
