The Federal Court of Justice will address the question on Thursday (10:00 a.m.) of how long credit reporting agencies such as Schufa are allowed to store information about payment defaults.
Federal Court of Justice examines Schufa data retention periods
The plaintiff in the case had paid several bills late. Schufa stored this information for several years after the bills had been paid – and based on this, classified his credit risk as "very critical".
Whether and for how long credit agencies are allowed to store data on settled debts is not clearly regulated by law. However, credit agencies in Germany have established their own set of rules, which have been approved by the Hessian Data Protection Commissioner. These rules generally stipulate a storage period of three years for settled payment defaults. In certain cases, storage ends after only 18 months.
No legitimate interest in the data?
The plaintiff argues that continuing to store already settled debts violates the European General Data Protection Regulation (GDPR). The Higher Regional Court of Cologne ruled in his favor in April, ordering Schufa to pay €500 in damages. The court reasoned that once the debts were settled, the business interest in the data ceased.
Schufa appealed the ruling to the Federal Constitutional Court in Karlsruhe, bringing the case before Germany's highest civil court. The credit agency argues that without data on past payment problems, companies can no longer accurately assess the risk of future defaults. It is unclear whether a verdict will be reached on Thursday. (Case No. I ZR 97/25)/jml/DP/zb
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