If you plan to pack up and move to another country, here’s one thing you can’t take with you: your credit score.
U.S. credit scores reflect the creditworthiness of U.S. residents. Other countries have their own systems to judge whether borrowers are likely to pay off their debts.
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Credit scores aren't shared between countries, partly because data protection laws vary. If you plan to live as an expatriate, here are a few things you should know.
Assessments of creditworthiness differ around the world. Some countries, such as the Netherlands and Spain, rely on negative reports — that is, credit mistakes like unpaid debt.
Other countries, such as Canada and the United Kingdom, have scoring systems that are similar to the U.S. When more information is used to assess creditworthiness, many of the same factors — like paying on time and keeping balances low — help build a good credit reputation.
How scores work in Canada
To get an idea of how credit-scoring customs can vary abroad, look no further than our neighbor to the north, Canada.
Canada’s credit scoring is similar to the U.S. system. For instance:
Scores are on a common range (in this case from 300 to 900), and higher is better.
The two major credit reporting bureaus are TransUnion Canada and Equifax Canada.
Scores are calculated using five factors: payment history, outstanding debt, credit account history, recent inquiries and types of credit.
In the U.S. system, scores most commonly range from 300 to 850, unless it’s a specialty score like an automotive or insurance score. The U.S. has one additional reporting bureau, Experian.
Like the U.S., the U.K. has three major credit bureaus: Equifax, Experian and TransUnion.
Each bureau has its own credit-scoring system with its own range. All three ranges begin at 0. Equifax’s scores go to 1,000, Experian’s to 999 and TransUnion’s to 710.
Some other information is also considered. For example, registering to vote can help your credit; in the U.S., voter information isn't included in credit reports.
Your U.S. credit score won’t follow you
Leaving your credit score back in the States may sound appealing if you’re hoping to escape your debts by moving abroad. It’s not that simple. Often, when you apply for a visa in another country, your debt will be examined. If it appears you’re trying to avoid paying off debt, your application will likely be denied.
Maybe you’ve been good about repaying debt. You may have other reasons why you want to join U.S. expats in popular destinations like the United Kingdom, Australia and Mexico. You still can’t take your credit score.
You may, however, be able to get along using U.S.-issued credit cards, but you’ll want to stick with those that have no foreign transaction fees and be sure to keep a U.S. bank account open because you’ll need to pay the balance in U.S. currency.
If you want to establish new credit in a different country, you can open an account, perhaps a secured card, to begin to build credit in your new country of residence.
How to preserve your U.S. credit profile
If you leave the United States to live as an expat for a while, remember to maintain your U.S. credit for when you return. This task will be easy if you occasionally use your U.S. credit cards.
With electronic delivery of bills and payment in U.S. dollars, keeping your credit report current shouldn't be a problem. You could even consider putting recurring charges on a card and paying by autopay to keep an account open and current. And you can — and should — check your own credit from time to time to make sure the records are accurate.
It’s smart to get copies of your U.S. credit reports and scores if you think they could work to your benefit, and it never hurts to ask if they could be considered.
U.S. credit scores reflect the creditworthiness of U.S. residents. Other countries have their own systems to judge whether borrowers are likely to pay off their debts. Monitor your credit, track your spending and see all of your finances together in a single place.
Your credit score will not follow you to another country, but your financial situation, including your debt levels and income, will still play a pivotal role. Creditors cannot share your financial information abroad and different countries have different standards for assessing creditworthiness.
So Credit Reference Agencies don't have standardised, international credit reports for individuals. They can only collect data about your borrowing in the country where they are based. If you move abroad, you will essentially be back to square one when it comes to your credit score.
What countries have credit scores? Countries around the world including Canada, the U.K., Spain, China, and Japan use credit scoring systems. Not all countries that use credit scores have systems like the U.S. Some only track negative marks like late or missed payments, while others track total debt or debt history.
You typically can't transfer your credit score from another country to the United States. A universal credit system doesn't exist, and due to the disparities in scoring systems, an international score may not seamlessly translate to the American credit system.
If you choose to move to a different country while you have debt in the U.S., nothing can stop you. However, you'll still be obligated to pay your debt no matter where you live. Your contract with the credit card companies and other creditors states that you must pay no matter the circ*mstances.
There's no law saying you can't move to another country if you have debt—even if it's in collections. But if you've taken on debt in the U.S., you're contractually obligated to pay it, regardless of where you choose to live. Living abroad can make it more difficult for creditors to find you and collect on your debt.
While the major credit bureaus in the U.K. and the U.S. are the same — Equifax, Experian and TransUnion — your U.K. credit history does not automatically transfer to the U.S. when you move between these two countries.
Your credit report and credit score don't follow you when you move to another country. But it is important to know that some debts you owe will remain active. Lenders may find it harder to pursue legal action against you when you are in a different country.
Unfortunately, your Canadian credit history cannot follow you to the United States. While credit reporting companies like Experian have operations in multiple countries, the information they maintain in each individual nation cannot be transferred across national boundaries for several reasons.
Economies with the highest credit rating at S&P Global Ratings, Fitch and Moody's Investors Service include Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore and Australia. Canada is rated AAA by two of the ratings companies.
FRANCE is one of several countries that does not use credit scores in the same way as the US or UK, so it has no central credit bureau or credit-scoring companies.
Does your credit score follow you to another country? Typically, a credit score is only applicable within its respective country. If you decide to move to another country, you'll likely need to build a new credit score.
No, your credit score does not transfer automatically when you move to countries. Each country has its credit system and reference agencies. This makes it necessary to build a new credit history in your new country of residence.
Credit scores aren't shared between countries, partly because data protection laws vary. If you plan to live as an expatriate, here are a few things you should know.
Visa and Mastercard are the most widely accepted throughout the world. If a business accepts credit cards, your Visa or Mastercard will likely work fine. The other two — American Express and Discover — do have a global footprint, but they are accepted at fewer merchants.
The question that arises is, Does US debt follow you to Canada? The short answer is no, your credit history usually doesn't automatically transfer when you move countries. However, if you have income or assets in the US, the collection process for your debt may commence there.
A judgment can allow a creditor to file a lien against your property or garnish your accounts, for example. While they can't keep you from leaving the state or country, the creditors can keep you from taking some of your assets with you.
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