What Happens To Your Credit Score If You Move Overseas?
You’ve spent all your life in Malaysia. Carefully crafting a good credit record, always paying your loan installments on time, and occasionally swiping that credit card to remind banks that you exist. Then one day, you are offered your dream job; but… it’s in another country.
So what happens to all your hard work? Will you be able to use your existing credit score to apply for loans overseas? If it doesn’t, can you just stop paying bills and get away with it?
Simply put, your credit score cannot travel with you to new countries. This is because there is no international standard for credit reporting. Every nation has its own practices and regulations; this includes countries across the European Union.
Some countries employ the same company to keep track of credit ratings. For example, the US, UK, and Canada make use of Equifax. However, due to differences in reporting, these scores are only applicable in their home country. Canadians can’t even take their scores across the border.
Similarly, Europe doesn’t have a unified concept of credit. So while you may be able to cross the border between Germany and the Netherlands without a passport and still pay in the same currency, your credit rating doesn’t follow you.
This also covers Malaysians moving across the causeway into Singapore.
Essentially, you will be leaving everything behind and starting over fresh. However, this does not mean that you can use this to escape a low credit score.
While it’s tempting to believe that you can leave it all behind and start over, that isn’t quite the case. Most countries want reliable and productive members of society; i.e. people who remember to settle their loans.
In this case, many immigration departments will still refer to your existing credit report when assessing your visa application. The score might not matter, but they can still take a good look at your payment history.
In other words, it always pays to maintain a good record.
Leave it all behind?
Knowing this, should you just abandon your credit score after moving to another country? After all, it doesn’t count for future credit applications in your new home.
This is a little less straightforward. There’s no reason for you to maintain a credit record if you have no intention of ever going back. Unless you’re that sort of good-hearted person that does this sort of thing.
On the other hand, life is extremely unpredictable. You may end up having to come back one day, and then find yourself in the position of having to rebuild a credit score from scratch all over again.
You don’t even need to do much to do much to keep your credit report alive. Using your old credit card every now and then is good enough. Just remember to pay the bill at the end of every month to avoid accidentally tanking your score.
There’s plenty that goes into moving to a new country, and you could be excused for overlooking your credit score. You don’t really think about opening new lines of credit for a while.
That said, everything would go much more smoothly if you do take your credit score seriously when preparing to move. Mostly because you don’t want to have to give up your dream job because you have a poor rating.
If anything, it’s best to keep track of how you’re doing and take steps to improve your score if you’re lagging behind. The first step is to literally keep an eye on your score, which can be done for free using iMoney CreditScore. This friendly tool will help retrieve your credit score through a partnership with RAMCI, and will also provide additional advice and help on improving your rating.
After that, well, that depends on what your score is like. You might just need to keep doing what you’re doing, or you might need help. Regardless, we have plenty of additional resources to help guide you on your way.