BGH Decision on Data Processing by Credit Agencies
On December 18, 2023, the Federal Court of Justice (BGH), under the case number VI ZR 972/25, decided that credit agencies such as Schufa Holding AG are not required to delete entries about settled claims from their data sets immediately after payment. This decision concerns the processing of personal data in the context of balancing individual protection and the legitimate economic interest in reliable credit information.
Background of the Proceedings
The case focused on a consumer whose default in payment was initially reported to Schufa. After the claim had been settled, the individual requested the immediate deletion of the relevant entry. However, Schufa did not remove the data set right away, but instead referred to established deletion periods as handled in the industry.
Legal Framework
The court had to determine whether the continued storage of such information complies with European data protection law, in particular the General Data Protection Regulation (GDPR). A key standard of review was Article 6(1)(f) GDPR, which permits processing if the credit agency and third parties have legitimate interests and these are not outweighed by the interests of the data subject.
Main Considerations of the Court
Admissibility of Continued Storage
The BGH determined that settling the claim alone does not necessarily lead to the immediate deletion of the entry. Schufa’s storage practice is based on standardized periods, taking into account the interests of both debtors and contract partners, who are to be protected against considerable payment defaults by means of credit information.
Compliance with GDPR Requirements
According to the court, the mere fact that personal data was entered into the credit agency’s database and that the claim was later settled is not sufficient. Information about previous payment difficulties may continue to be taken into account for a limited period in order to fulfill the purpose of credit agencies in assessing future creditworthiness.
Significance for Affected Individuals and Data-Processing Companies
With this ruling, the BGH emphasizes the importance of a balanced consideration of interests. The temporary storage of settled claims remains permitted as long as the retention period appears reasonable and affected persons continue to have opportunities to exercise their rights.
Practical Implications
The decision confirms that Schufa and comparable agencies do not have to delete settled payment claims immediately after fulfillment. Crucially, limited storage of personal data remains permissible as long as this is balanced with the protection interests of affected parties. The exact design of retention periods will still depend on each case and remains under ongoing review.
For pending proceedings, the presumption of innocence applies; the scope of the decision may be subject to future developments. Source: BGH VI ZR 972/25.
For companies, investors, or asset holders, situations at the intersection of business and data protection are increasingly relevant. Anyone facing sensitive questions about data processing and its legal framework can receive professional support from the MTR Legal team in the Legal Advice for Data Protection section.
