Do other countries have credit scores?

In the United States, your credit score is a crucial piece of your financial life, affecting whether you can get the best credit cards, finance a new car, rent an apartment or even get a job. If you dream of moving to another country, you may wonder if you can bring a good credit score with you — or leave a bad score behind.

In short, your American credit score and credit history won’t move with you to a new country. Other countries have individual credit scoring systems, so you’ll need to start building a new credit history once you arrive. However, many of the same habits that helped you build a score at home will help you establish credit abroad.

Why your U.S. credit score won’t follow you internationally

If you’ve worked hard to repair your credit and build a good score, it can be frustrating to learn your U.S. score won’t transfer to another country. Unfortunately, there’s no global credit score because scoring models and regulations vary from country to country.

Your U.S. credit score only reflects how well you manage credit from U.S. lenders, based on factors such as your payment history, length of credit history and usage of available credit. Other countries have their own standards for assessing a borrower’s creditworthiness and different data protection laws that affect the sharing of credit information.

How credit scores work in other countries

Each country has its own way of measuring borrowers’ financial reputations. Some countries have credit scoring systems that work similarly to those in the U.S., while others have very different scoring customs. Here’s an overview of how credit scores work in some popular destinations for Americans.

Canada

In Canada, credit scoring is similar to the United States. Two of the three major credit bureaus (Equifax and TransUnion) operate in Canada, and scores range from 300 to 900, with a higher score being better.

Many of the factors that contribute to a good credit score in the U.S. will also benefit you in Canada. Equifax Canada explains that payment history and credit utilization are the main parts of the score. Length of credit history, new credit inquiries and public records (like collections or bankruptcy) play a smaller role.

Mexico

In America’s neighbor to the south, consumer credit information is tracked by the Buró de Crédito. The bureau calculates credit scores based on the likelihood a borrower will miss payments using factors like a history of on-time payments.

Another bureau, the Círculo de Crédito, is partnered with FICO and uses FICO scoring models.

The United Kingdom

Like the United States, the U.K. has three main credit bureaus: Equifax, Experian and TransUnion. The credit bureaus consider familiar factors like payment history and credit utilization. However, the scoring ranges are different, with Experian’s range going as high as 999.

In the U.K., being registered to vote improves your credit score, Experian says. Another difference is that financial associates — joint account holders or co-borrowers — show up on your U.K. credit report. Lenders may check your associate’s credit when they assess your loan application.

Australia

Australia has three major credit bureaus: Equifax, Experian and Illion (formerly known as Dun & Bradstreet Australia). While in the U.S., credit scores typically range from 300 to 850, an Equifax score in Australia can go as high as 1,200.

In Australia, credit scores are calculated based on several factors, including your payment history, the total value of your loans and how much you need to repay. Paying bills on time and repaying debts helps build your score.

Tips for establishing credit in other countries

The best practices for establishing credit abroad will vary depending on your destination. Research your new country to learn the basic requirements for establishing credit. In general, some tips for establishing credit in a new country include:

• Applying for a secured credit card: Secured credit cards are among the easiest credit cards to get because they’re backed by a cash deposit. Availability varies by country.
• Getting a co-signer: If you have a close friend or relative in your new country, ask them to co-sign your loan. Adding a co-signer may increase your chances of loan approval since it reassures the lender the funds will be repaid.
• Managing new credit responsibly: Once you open credit accounts in your new country, make payments on time, every time. Avoid opening too many accounts at once, and monitor your spending to stay under your credit limit.
• Talking to your U.S. creditors: Some U.S. banks and credit card issuers also operate internationally. When you move, they may agree to issue credit in your new country based on your U.S. account history.
• Using your U.S. credit reports: Experian suggests making copies of your credit reports from all three bureaus so you can show them to potential lenders in your new country. A history of on-time payments and low credit utilization could help prove that you’re a responsible borrower.

How to preserve your U.S. credit score while away

Because a credit score is an essential part of your financial life in America, it’s important to take steps to maintain your credit if you plan to return. To maintain your credit while you’re abroad, consider:

• Freezing your credit reports: A credit freeze limits access to your credit reports, which can help prevent identity thieves from opening new loans or credit cards in your name while you’re away. You can unfreeze your credit when you return.
• Keeping your U.S. credit cards open: A longer credit history has a positive impact on your FICO scores, so if possible, avoid closing your oldest cards when you move. Consider using your cards for small purchases to keep them active.
• Pay your credit card bills on time: To maintain a good payment history, remember to pay your U.S. credit card statements on time, every time. Consider signing up for paperless statements and automatic payments to ensure you stay on top of the bills while abroad.

The bottom line

Many countries use credit scores, but they don’t use the same credit scores as the United States. When you move internationally, you’ll need to start fresh with a new credit score. Fortunately, many of the same tactics that help you build credit in the U.S. can also help you build credit in other countries.

To establish credit, consider starting with a secured credit card or getting a co-signer. Build credit by focusing on managing your new credit responsibly. If you plan to return to the U.S. in the future, be sure to take steps to preserve your credit score.

Frequently asked questions

• What are the best U.S. credit cards for Americans living abroad?

  U.S. credit cards won’t always work abroad. Before leaving, research which credit card issuers are widely accepted in your new country. Determine if you’ll need to have a credit card with a chip and personal identification number (PIN), rather than the traditional swipe and sign cards.

  Foreign transaction fees are another thing to keep in mind. If your card has a surcharge for transactions processed outside the U.S., the costs could add up over time. Look into credit cards with no foreign transaction fees to save money.

• Should I tell my bank I’m leaving the country?

  It’s a good idea to tell your bank or credit card issuer the location you’re traveling to and how long you’ll be away. Banks monitor accounts for suspicious activity to protect customers from fraud. If they see foreign transactions and don’t know you’ve left the U.S., they might freeze your credit card account while they complete a fraud investigation. Regaining access from abroad could be inconvenient.

• What happens to your debt if you leave the U.S.?

  Unfortunately, leaving the country doesn’t mean you leave your financial obligations behind. You still owe the debts, and your creditors will continue trying to reach you. They may file a lawsuit to collect the amount you owe. Your wages could be garnished if you work for a U.S.-based employer while abroad.

  If you’re struggling with debt, consider setting up a debt payoff plan or contacting a debt relief company.

• Do any countries not use credit scores?

  Some countries that Americans might consider relocating to do not use credit scores. For example, the Netherlands does not have credit scores. Instead, the Dutch Credit Registration Office keeps a register of people who’ve failed to pay their debts. Americans who find themselves on this register could have trouble taking out loans.

  Spain is another country that doesn’t use credit scores. However, it does have a credit register that keeps track of borrowing activity, and your credit history may affect your access to loans.