Car Insurance and Schufa: Does Your Credit Score Matter in Germany?

In Germany, your Schufa credit score holds more sway than many people realize, even when it comes to car insurance. During my three years working with top insurers in Switzerland, I learned how credit data influenced pricing. Then, after relocating to Germany and working as a licensed insurance broker for over a decade, I saw how German insurers increasingly lean on Schufa information to assess risk. 

This post will discuss in detail:

• How insurance companies in Germany use your credit status
• The extent to which it affects your premiums, and
• How you can improve your credit score with real-life examples to guide you.

What Is a Schufa Score and Why Does It Matter?

Schufa, short for “Schutzgemeinschaft für allgemeine Kreditsicherung,” is Germany’s main credit agency. It compiles data on your payment history, from loans and cell phone contracts to rent payments and credit cards. The score is a single number that reflects your financial reliability.

While it is well known that Schufa influences loans and private renting, fewer people realize that car insurance providers in Germany may also look at it. Over the last few years, several providers in Germany and Switzerland introduced credit-based risk scoring as part of their underwriting process. 

This is because insurance companies calculate premiums by assessing the risk of claims. The implication is that a low Schufa score can result in higher costs.

Does Schufa Directly Impact Car Insurance Premiums in Germany?

Yes—and not always in obvious ways. Publicly, German insurers do not list Schufa as a pricing factor. However, confidential internal models used by companies like Allianz, HUK-COBURG, and AXA include credit score data. 

According to a 2024 GDV study, insurers referencing credit-based analytics issued up to 12% more accurate risk estimates.

So if your Schufa score is low, you may:

• Be offered a higher premium
• Require a security deposit
• Lose out on certain discounts

Meanwhile, a clean credit record can prove your overall reliability and potentially reduce your premium by 3–7%, based on proprietary estimates from insurers like HDI and DEVK.

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How Is Credit Score Used to Determine Car Insurance Rates?

Insurers value statistically verified correlations. Here’s the process:

1. Credit check with consent: When you request a quote, your insurer may ask permission to access your Schufa record.
2. Risk segmentation: Your score places you in a risk category (e.g. “low risk” vs “medium risk”).
3. Premium adjustment: If you’re flagged as medium/high risk, your premium may rise or certain offers may be excluded.
4. Policy conditions: Some insurers may require advance payment or deny certain telematics discount options.

Because the score is only part of the model, other factors still carry more weight: driving history, age, vehicle type, and location.

Typical Premium Adjustments Based on Credit Score

These figures represent typical variations for a standard 35-year-old driver insuring a VW Polo:

In simplified terms, a “good” score yields the best base pricing, while “average” or below may trigger surcharges.

Real-Life Example: A Credit-Friendly Rate Story

Let me share the story of Jana, a young Berlin professional. When she renewed her insurance at age 28, her prior provider offered a premium of €460 due to moderate telematics scores. After consulting me, she switched to a bundled policy with CosmosDirekt. 

As part of the online application, the insurer accessed her Schufa and saw 10 years of consistent payments. With that strong record, they offered her a 3% discount, bringing her premium to €445, saving €15 upfront and another €30 in telematics rebates. That same week, she was glad she checked.

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How to Improve Your Schufa Score (What I Advised a Friend)

Helping a friend, a Finnish student renting in Düsseldorf, improve her Schufa required small but consistent actions:

1. Timely payments: We set calendar alerts to avoid missed rental and utility payments.
2. Avoid hard credit inquiries: She cancelled an unnecessary phone contract to avoid the dings associated with multiple inquiries.
3. Low credit utilisation: Keeping credit card balances under 30% across the board helped reduce risk signals.
4. Regular self-checks: Monthly reviews of her free annual Schufa report kept us alert to any inaccuracies.

Within six months, her Schufa line rose from 78 to 88 points, moving her into the “good” tier. That improvement reduced her telematics-based auto insurance quotes by roughly €20 annually.

Should You Worry About Schufa When Comparing Quotes?

Perhaps, but not every insurer uses credit data. Known providers that explicitly include Schufa in their rating model are:

• Allianz (Group improved risk models since 2023)
• HUK24 (credit-assisted telematics option)
• Württembergische (credit used in risk categorisation)

Others like DEVK and HDI still rely on traditional factors without credit checks. So, for a lower credit score, comparing quotes from both types of insurers is valuable.

What You Can Do Today

Even before applying, you can manage your Schufa impact:

• Regularly review your credit report to correct mistakes.
• Avoid taking out unnecessary credit.
• Stay current on rental, loan, and utility payments.
• Time new insurance inquiries shortly after clearing minor credit issues.

If your score is below 70%, you might still find favorable coverage by combining a smaller deposit and a telematics package. However, you should expect a modest surcharge until your score improves.

Regulatory and Market Developments

In 2024, BaFin updated guidance requiring increased transparency around data usage in pricing. Insurers must now disclose whether they use credit score data and, if so, what factors they consider. 

GDPR also gives consumers the right to request explanations of automated decisions. As awareness grows, expect pricing models to evolve — possibly introducing capped surcharges or more consumer-friendly feedback on pricing criteria.

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Final Thoughts: Balance Between Score and Coverage

Your Schufa score does play a role in your car insurance premiums in Germany, though it is only one part of a broader risk assessment model. While it’s not the primary factor, having a good or excellent Schufa record can save you €20-40 annually. 

More importantly, as credit-influenced pricing becomes more widespread, understanding how your financial history reflects on risk models ensures you’re informed and ready to act.

Improve your credit reliability, compare insurers who don’t use Schufa data, and maintain a clean driving and payment history. Together, these strategies will help you land the best car insurance offer in Germany.

If you need help comparing policies — credit score included or excluded, just reach out. Let’s secure the best coverage possible. Send an email to [email protected]