Planning a move abroad, whether for employment, retirement, or a lifestyle change, raises a number of questions. Where will I live? What is the cost of living? Can I handle the culture shock?
While financial considerations play an important role in a decision to move abroad, many future expatriates wait until it’s too late to ask one vital question: Will my credit score follow me abroad? It’s an important query whether you have good or bad credit. But, the answer isn’t quite as simple as yes or no.
Put simply, your credit score won’t follow you abroad, but your payment history and debts will. Let’s take a closer look.
Credit Scores Vary from Country to Country
Your credit scores apply to your credit history in the United States and indicate your creditworthiness as a U.S. citizen. If you choose to move abroad, your current credit score will have little to no influence on your ability to borrow money in your new home country. That’s true whether you move to Toronto or Timbuktu.
That doesn’t mean other countries don’t use credit scores. Many do. Some countries’ credit scoring systems feel more familiar than others. Canada’s system, for example, shares many traits with the U.S.’s. Here’s a snapshot:
- Canada’s two major credit bureaus are TransUnion Canada and Equifax Canada
- Credit scores in Canada range from 300 to 900 (FICO and Vantage scores range 300 to 850 in the U.S.)
In the United Kingdom, simply registering to vote can help improve your credit score. Lenders use the Electoral Roll to confirm identifying information like your name and address. If you’re not on the Electoral Roll, your application could be delayed or even denied.
Your History Still Matters
Even though you won’t take your credit score with you, your credit past might as well be an extra piece of luggage — it’s coming too. Unless you plan on living exclusively from cash, you’ll need to secure a loan or credit at some point during your time abroad.
When applying for a new credit card or for a new loan outside of the U.S., your credit history will be examined by potential lenders. They might not look at your score, but they’ll still see the credit history that’s resulted in the score.
Maintaining Your U.S. Credit Rating
If you plan to return to the United States, or even visit frequently, be sure to maintain (or improve) your credit. Continue paying down those credit card accounts and any other loans you have. If you plan to keep or rent out your American home, ensure you’re still making timely mortgage payments.
With an eye toward returning, also make sure to keep your existing accounts active. Make purchases on Amazon or pay any recurring bills (Netflix, Prime, or other digital subscriptions) with your U.S. credit cards.
If you’re planning to move abroad, or have recently moved, and want to repair your credit, a lawyer can help. Lawyers understand consumer protection laws and can help leverage your legal rights so that your credit reports remain fair and accurate.
The lawyers and paralegals at Lexington Law can help you repair your credit. Contact us for a free credit repair consultation, including a complete review of your credit report summary and score.