Supporters of the current credit reporting system argue that Schufa provides an essential service that stabilizes the German economy. By accurately assessing the risk of default, the agency allows banks and businesses to offer credit at lower interest rates. Without such a mechanism, lenders would likely increase costs for everyone to compensate for the uncertainty of not knowing a borrower's financial history.
The proprietary nature of the scoring algorithms is often defended as a necessary protection against fraud. If the exact formulas were public, bad actors could potentially manipulate their data to artificially inflate their creditworthiness. This would undermine the integrity of the entire credit system, leading to higher rates of default and financial instability for the institutions that rely on these assessments.
Furthermore, proponents emphasize that Schufa operates within the strict framework of the General Data Protection Regulation. They argue that the agency is subject to regular audits and oversight by data protection authorities, ensuring that the data used is relevant and legally obtained. The system is designed to be a neutral, data-driven tool rather than a subjective judgment of a person's character.
Ultimately, the focus remains on the predictive power of the models. By analyzing patterns in payment behavior, Schufa helps ensure that credit is extended to those who can afford it, which protects both the lender and the borrower from the dangers of over-indebtedness. Maintaining the confidentiality of these models is seen as a key component in keeping the credit market efficient and secure.