Does my U.S. credit score follow me when I move abroad?

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Moving to another country can be exciting, but it also means you need to do a lot of research. Are your language skills good enough? Where will you live? Do you need to pay your remaining debts? Will your credit score move with you?

While abroad, you’ll still be responsible for any remaining balances on your debts in the United States. One thing you won’t be able to do is to bring your credit score to your new country. You’ll need to build a new credit profile based on that country’s rules and guidelines.

Your U.S. credit score won’t follow you abroad

Each country calculates creditworthiness independently of other countries’ systems. This means you start living in your new country without any credit. It’s still your responsibility to pay any outstanding debts in the United States, though—paying what you currently owe is important no matter where you live.

Starting from scratch can be a tremendous help to people with lower credit scores. You hit the reset button on your credit and start fresh in a new location. There are three main credit bureaus in the United States: TransUnion^®, Equifax^® and Experian^®. Each collects information from lenders or creditors that lend to you. This information can show how responsible you are when it comes to your debts.

These bureaus have divisions in other countries, but the different divisions are kept separate throughout the world to protect you from fraud and keep your information private. It could still be beneficial to show foreign lenders your U.S. credit report, but it may not be accepted by every lender.

Do other countries have credit scores?

In short, yes, some countries have some kind of a credit score. Some of these countries have credit systems that are similar to the United States’, while other countries rely on different methods of judging creditworthiness.

Credit in the U.K.

The credit score calculation system in the U.K. is similar to the method used in the U.S. The prominent companies used are Experian, Equifax and Call Credit. Each of these bureaus calculates your credit score differently. They’re similar to the U.S. because they score your credit based on your payment history and credit utilization. However, according to Experian U.K., you can improve your scores by registering to vote or explaining why you can’t vote.

Credit in Japan

Japan doesn’t use an official credit scoring system. Relationships form between the consumer and the bank. If you work with an international bank that has ties to a bank in Japan, your credit score may be considered. Additionally, every bank may not lend to foreigners, and most banks’ criteria for lending include length of employment and salary.

Credit in France

France is another country without an official credit scoring system. Instead, it bases your lending power on your savings and salary. For example, French Property states you’d need 3 months’ worth of bank statements and a down payment of at least 15 percent to be considered for a mortgage.

Credit in Germany

Germany uses a private company called SCHUFA to monitor credit reporting. According to the Open Knowledge Foundation, SCHUFA bases the credit score calculation on criteria similar to the U.K. and the U.S.

Do your research before you go

Whatever country you decide to move to will have different criteria for its banking system. You’ll want to do your due diligence in preparation for anything that may come up while living abroad.

As a foreigner, you could face many challenges trying to establish credit and borrow money in another country. If possible, do a lot of research to ensure you don’t miss something important.

Protect your credit while you’re abroad

You’ll need to protect your financial information while living in another country. There may be a time when you wish to return to the U.S., and you don’t want to leave your credit to chance while you’re away.

It’s important to keep paying any debts you still owe in the U.S. You’ll still need to make payments on everything from mortgages to credit cards, or you risk hurting your credit. By keeping up on your payments, you’ll return to the States in good standing as far as your credit is concerned.

Place a fraud alert or credit freeze

Freezing your credit or placing a fraud alert on your accounts can help you protect your credit.

A credit freeze stops your credit report from being accessed by anyone. While you’re abroad, your information is at additional risk of being compromised, and it can be even harder to catch fraud when it happens. Freezing your credit can help you with prevent this problem. When freezing or unfreezing your credit, you’ll need to contact each bureau individually. 

A fraud alert protects you by directing any potential lenders to verify your identity before letting someone open an account in your name. This option is less foolproof but might be more convenient for you. When you place a fraud alert on your accounts, you’ll need to contact each of the main bureaus separately.

Keep your U.S. accounts open

According to the Expat Network, it’s crucial to maintain your U.S. credit score regardless of where you move. Bad credit can affect your ability to gain entry into another country by denying you access to a visa or other documents you may need while living in your new country.

When living abroad, you’ll want to keep your accounts in the U.S. open and current. Sometimes accounts close when they go idle for a while, so keep things like your credit card accounts active to make sure positive credit history can still build. Plus, whenever you return to the U.S. for a visit, you can use these credit cards and save money on foreign transaction fees or ATM fees.

Use a good travel credit card

Credit cards not meant explicitly for international travel may hit you with fees every time you use them. Foreign transaction fees add up over time, primarily if used to purchase daily items. Using a card meant for traveling can be cheaper and ensure your transactions aren’t denied.

Credit cards with a chip are considered much safer than a card you swipe. Many other countries will require your card to come equipped with a chip. Travel credit cards typically have chip embedded in them.

Check your reports when you return

When you get back to the United States, you’ll need to be sure to check your credit reports to see if there are any discrepancies. In some cases, you’ll see that older debts fell off your credit reports, depending on how long you were away. If you don’t recognize something on one of your credit reports or if it’s more than seven to 10 years old, you may be able to get it removed entirely. You can dispute an inaccurate item by contacting each relevant bureau or lender.

Whether you’re just planning to move or you’ve already moved to another country, a professional can help you if you want to repair your credit. This person or company should know the ins and outs of consumer protection laws to help ensure your rights and keep your credit reports accurate.

The lawyers and paralegals at Lexington Law can help you work to repair your credit. Contact us for a free credit repair consultation before your big move. A free consultation with us includes a thorough review of your credit report and score.

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