Your credit score in the U.S. will likely not matter much overseas. If you are traveling internationally, you will find that the American version of the credit score is not the same in other countries.
Some countries may use a different type of credit score, or they may not use a credit score at all. Learn about how your U.S. score does not translate to determine your overseas creditworthiness, and what factors are considered abroad.
Key Takeaways
- A U.S. credit score has no bearing overseas, neither harming nor helping you with lenders in another country.
- There are no international credit scores and laws prohibit the sharing of credit information overseas.
- Lenders assess your credit worthiness in different ways specific to a country or region, like factoring in your debt and income.
- Many countries have a credit scoring system, but you will typically need to start building credit history with loan products in that country.
How Other Countries Use Credit Scores
Many countries, including Canada and the U.K., have credit scoring systems that are similar to the American system. Yet, there is no communication between the systems. So your credit score in the U.S. will not affect your credit score in the U.K.
Countries may consider other factors for determining your creditworthiness that lenders in the U.S generally do not. For example, in the U.K., lenders see your registration to vote, which is required by law, as a positive sign.
Other countries may not have credit scoring systems at all. For example, lenders in Japan make individual assessments based on factors like your relationship with the bank, your income and debt.
National and international law prohibit sharing credit histories with overseas lenders in part to protect consumers from identity theft.
So foreign lenders will not have access to your American credit score, but you can still expect a review of your basic financial information if you want to apply for a loan like a mortgage or car loan.
Overseas banks and lending institutions may inquire about outstanding debts in your home country. Expect to have to verify your income from your current employer as well.
How Poor Credit Translates Abroad
If you've consistently missed credit card payments or defaulted on a car loan, you may look forward to starting fresh in another country. In fact, much of your negative credit history may not translate abroad.
For example, if you've filed for bankruptcy in the U.S., another country may not recognize that negative event in your credit history. So, you may be able to qualify for a car or home loan in another country based on your current debt level and income even if you wouldn't qualify for one in the U.S. if your credit was damaged by bankruptcy.
Your credit history, including negative events like bankruptcies won't disappear from your credit history in the U.S. if you move to another country.
However, if your poor credit is due to factors like you carrying a heavy debt load, a lender overseas will likely take that into account.
How Strong Credit Translates Abroad
If you have good credit in the U.S., it can still be useful in another country, even if the country does not recognize U.S. credit scores.
For example, you could provide your U.S. credit report to lenders in another country to help support the fact that you may be a lower risk borrower.
Many of the factors that contribute to you having a good credit in the U.S. will be recognized by lenders abroad. Namely, if you carry lower debt loads and do not use the majority of your available credit, you are likely to be viewed positively by lenders abroad.
Building Credit Abroad
If you move abroad and plan to move back, don't give up your U.S. credit cards. If possible, keep active savings, checking, and credit card accounts based in the U.S. Be sure to follow any minimum usage requirements on the account so it is not simply closed for inactivity, and use a card with no foreign transaction fees.
If you can't get a standard credit card in your new country, you may need to start building credit such as by opening a store credit card. Make regular purchases and pay the bills promptly to start building a credit history there.
Be prepared that if you return to the U.S., your U.S. credit score will apply to any lending decisions. So, it's important you continue to pay your U.S. debts on time, even if you live abroad.
Returning to the U.S.
If you plan to remain overseas for at least seven years, you'll find that any delinquencies or negative marks on your credit report may have been removed during that time.
You can also try to improve a poor credit score by making all your minimum payments on time, having a healthy credit mix, and keeping your credit utilization rate low. A significant negative event on your credit report like a bankruptcy can take up to 10 years to drop from your credit history.
Remember, you don't need to close all of your U.S. accounts before you move to another country. If possible, keep savings or checking and credit card accounts active.
Finally, check whether any of your existing credit card accounts have established a global card relationship in the area you're looking to relocate. For example, if you already have an American Express account opened in the U.S., your cardholder status may help you establish credit in your new country while maintaining your good credit history in the U.S.
What Countries Use FICO Scores?
FICO scores are used in many markets around the world, including Mexico and Canada. It's used in a total of 30 countries. However, the information in your credit history does not translate from country to country. Your FICO score will be different in each country.
Which Countries Don't Use Credit Scores?
Not all countries use credit scores. For example, Japan has no central scoring system. Instead, individual banks determine your creditworthiness based on your relationship with them, as well as your income and debt. Spain also has no credit scoring system, although your credit history is tracked by a credit register.
Is There an International Credit Score?
There is no international or global credit score that is used by more than one country. Instead, lenders in each country have different criteria for assessing borrowers. Your credit score does not translate from one country to another.
The Bottom Line
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.
