From applying for finance to buying a house, it can feel like your credit score crops up everywhere. But if you’re setting up a new life overseas, your credit score won’t follow suit.
What happens to your credit score if you move abroad?
Whether your score is excellent or something you’d rather forget, it’ll stay put in the UK. Depending on how your score looks, this can either be a setback or a great opportunity to start afresh.
Your credit score won’t disappear off the face of the earth, though. If you move back to the UK (or your home country), you’ll simply pick up where you left off. By the time you return, your score may have improved of its own accord. For example, bankruptcies might have dropped off your report since you left – or you may have repaid some debt while you were away.
But while you’re abroad, you’ll need to focus on credit agreements in that country to boost your new credit score.
What happens to your debt if you move abroad?
Unlike your credit score, your debt will follow you to other countries. While it can be harder for lenders to take legal action against you while you’re abroad, it’s not impossible.
If you return home, your debts might lead to a County Court Judgement. Or, if they were secured debts, the lenders could take action and repossess your property.
Building your credit score in a foreign country
When it comes to starting life in a new country, you’ll need to start building your credit from scratch. Arriving in a different country means you’re a blank slate, credit-wise – so you’ll have to prove your credit-worthiness all over again.
While building credit from the ground up can take time, it’s (arguably) easier than repairing a bad credit score.
These tips can help you start:
- Use an international bank account. If you use an international account before you move abroad, it can be easier to open an account when you arrive. It could be possible to ask the UK branch to run a credit check on you so you can share this with the new branch.
- Maintain your UK credit score. If you’re only moving away temporarily, it’s worth keeping up with your UK credit agreements. Continuing to pay Direct Debits and reducing credit card debt will help keep your credit score in good shape for your return.
- Research your new country. Different countries have different ways of monitoring your credit history. Take some time to see how the credit system works in your new country, as it could be totally different from the UK.
Building your score in the UK
Just landed in the UK? Before you apply for finance and climb onto the property ladder, you’ll need to establish a decent credit history. Here’s how you can make a start:
- Use a credit builder card. Some lenders consider thin credit scores, so it could be worth applying for a ‘bad credit’ credit card. See if you’re eligible before you apply to avoid damaging your credit score.
- Use a guarantor. If you have a close friend in the UK, they could help you get accepted for finance. A guarantor agrees to repay your debts if you can’t, which can help you get approved – even if you don’t have a history of using UK credit.
- Get a copy of your overseas credit report. If you have a positive track record of making payments in your home country, this could help your application.
- Take out a small form of credit. Setting up a Direct Debit to pay for a mobile phone contract or utility bills can help you improve your credit history.
