The Expats Guide to Building Credit in Germany

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Having a good credit score is very important to your finances. You may not realize it now but it affects many things in your life: Your credit score can determine whether a landlord will rent to you or not; it can affect your ability to get a mobile phone or a mortgage on a house; it can even prevent a bank from loaning you money to buy everyday things (which means no credit cards since those are basically loans). So what do you do as an expat in a new country with no credit?

Our guide below will help outline the steps needed to establish yourself in Germany as an expat so you can begin building credit (and test your pronunciation abilities because German government terminology is not known for its brevity).

Let’s start with a brief education of the German credit system as it can be confusing for many.

The Schufa

Germany’s sophisticated credit system is called the SCHUFA (shorthand for Schutzgemeinschaft für Allgemeine Kreditsicherung).  As a resident of Germany, this system immediately begins collecting data on your financial history in order to calculate a score. This score will then stay with you for the duration of your residency in Germany.

The Schufa is based on a 100-point scale and gets “dinged” when you are delinquent on payments.  Beyond that, exactly how this score is calculated continues to be a mystery. We do know that scores around 90 are considered positive and should not negatively impact you with lenders.

Every resident is entitled to one free copy of their report per year. Should you need to request an additional copy the Meineschufa website is a great resource to check out.
Meineschufa- Schufa

Building credit in a new country takes time. So be diligent about paying bills in full on time.

The Anmeldung

Understanding the Schufa is important for all German residents. However, before you can even get a Schufa you must first go through the registration process known as ANMELDUNG.

The Anmeldung is an official document that every foreigner must submit within 14 days of arriving in Germany.

The Anmeldung requires you to register your address and this registration will be requested wherever proof of residency is needed. Getting health insurance and enrolling in a university are just two examples where proof of residency is needed. Proof of address is also needed in everyday things like getting a phone, setting up internet, and signing up for utilities.

How to file the form

You will need to visit a Bürgeramt office to actually file the Anmeldung form.  Their website and the link above will help find an office near you.

It’s recommended to use the Appmeldung website to fill out the form prior to your appointment at the Burgeramt. Not only will it save you time, but you can view it in English from various cities. The printed forms at the facility will most likely only be available in German.

Appointments are in high demand and sometimes fill up weeks out so be sure to book your appointment as soon as you know your arrival date. Walk-ins are an option as well if you are prepared to wait. If so we recommend you show up early, preferably 15 minutes before the Burgeramt opens.

What to bring to your appointment

  • Passport or National ID
  • Bring your tenant contract. If you are staying with a friend or relative, then have them sign a letter of reference. Here is a good example of a letter of reference courtesy of Settle in Berlin.
  • A signed “Wohnungsgeberbestätigung,” which is a document from your landlord confirming that you live there.
  • Your completed registration form for the Anmeldung already filled out.

Once you’ve completed the Anmeldung process, you’ll receive a Meldebescheinigung, which is the official certificate of completion.

It’s important to understand the Anmeldung and Schufa process because these are the first steps to building credit in Germany. And it’s important to know this because these documents are needed in order to obtain many everyday items. Here are a few things that can start helping you build credit and some tips along the way.

Opening a Bank Account

If you are planning on living long-term in Germany then a Current account is wise to have, if not necessary. Some banks will accept applications online but it is advised to visit a local branch to submit all the paperwork.

You will need to bring:

  • Your passport or National ID
  • Proof of address registration (Meldebescheinigung – discussed above)
  • Your university registration if you are a student
  • Some banks will ask for proof of income. To be safe bring your letter of employment with salary information if possible. Your last three paychecks will also work.

For foreigners moving to Germany without a local bank account, we recommend checking out the bank N26. The blog “Settle in Berlin” highlights other competitors, but N26 is a good choice for expats without residency. It may be the lesser-known name, but it is one of the only banks that does not require German residency (aka the Anmeldung). Other benefits like English support are listed below. The big banks in Germany, that you may also want to look into, are ING, Deutsche Bank, and Commerzbank.
German Bank Comparison

Renting an Apartment

Typically, landlords will request your SCHUFA in order to rent you a flat. When a landlord does this it is usually only the Schufa Statement, which doesn’t show your entire financial history. It is a high-level report and only displays if you have any negatives.

Documents you will need to rent:

  • Passport
  • Einkommensnachweis — proof of income from the past three months.
  • Mietschuldenfreiheitsbescheinigung — a signed document from your last landlord confirming that you’ve paid your rent in full and on time during the course of your tenancy.
  • Schufa
  • Bank statement (optional)— but only if you have a sufficient amount saved.

If you have never rented in Germany before, then it will be hard to obtain a signed Mietschuldenfreiheitsbescheinigung. If you are renting through Airbnb, you could ask your host to sign one, although it is a long shot. You can also ask your landlord from your previous country to sign one and then have it translated to German. Here is a sample of a German Mietschuldenfreiheitsbescheinigung you may consider using.

Without an address, you will not be able to file the Anmeldung which means you will not have a Schufa. In this case, you may want to consider alternative housing options.  Sites like Wunderflats and WG-Suche.De offer short-term rentals, furnished rentals, and flat-sharing options. Also, Berlin Craigslist could be something to look into.

Getting A Mobile Phone

Before you get a phone you should decide whether a prepaid plan or a contract plan is best for you. If you are staying for a short time, then a prepaid plan might be a good option.

However, for most expats, our time in a new country is for years or an unspecified amount of time. In that case, we recommend looking into a contract plan with a phone provider. If you already have the phone you want, then consider looking into a SIM-only contract. Otherwise, you will need to get a traditional contract including service and phone.

In either circumstance, you will be asked to your passport (or National ID) and your registration certificate, the Meldebescheinigung from completing the Anmeldung process.

A few providers:

If you have not registered your address and received your Meldebescheinigung yet then you may need to consider alternatives. No phone provider will give you a contract on a phone without it. Check out our article on Keeping Your Phone Overseas to hear alternatives and temporary solutions.

As an expat planning on staying in Germany for the long haul, it is important to establish yourself in the areas discussed above. Registering your address immediately is a crucial part of the process and is the starting point.

Taking these steps will ensure that you can begin building good credit quickly which will prove to be a worthwhile endeavor. If you decide you want credit cards, to lease or buy a car or purchase a home then having good credit will be required. Pay your bills on time and enjoy!

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