Credit Anarchy in the U.K.

January 17, 2009 2:56 AM

My credit score stinks in the United States, and I might be moving to the UK - what impact will this have?

I'm an American professional living in the United States and I've been offered a job in the London that I am rather inclined to take. The job pays extremely well, but I'm wondering about how my bad credit will affect my move overseas.

Will credit bureaus in England have access to my American credit score?

If they do, will it be much more difficult for me to find an apartment or open a bank account here? What other considerations am I not thinking about?

Thanks all in advance.

posted by anonymous to law & government (8 comments total)

Congrats! Your bad credit will not follow you. Your credit starts from scratch in the UK.

This is bad news for most people. I had good credit in the US but it meant nothing when I moved to the UK last year.

It means you should hang on to your US credit card and your US bank account since it will take a while to open one in the UK. Generally, your new employer will sponsor you, acting as a reference.

Same with getting an apartment. When I applied for one, they asked me for my UK rental history. When I said I didn't have one, they just asked for my employer info, confirmed how much I earned and - thats it!
posted by vacapinta at 3:22 AM on January 17

Australian who moved to the UK 12 months ago here...

The greater issue is probably the willingness of banks to offer their services to a person who has just arrived in the UK. In the current economic and political climate UK banks are obliged to check the people they deal with are legitimate.

You will need to have a UK address before you can get a UK bank account, but conversely you will need to demonstrate your financials to a landlord. Hence you see the problem

That said, it isn't too difficult to resolve. I moved from Australia to the UK last year. Speak to your HR people: they will often be able to provide you a letter of introduction to take to your bank. I didn't have too much problem setting it up, but I have heard some horror stories of foreigners trying to open a bank account.

As for the credit score: I would be surprised if it carried over from the US: unless your dealing with court judgements or the like.

For things like credit cards and loans, the one thing that might work against you is the fact you are a non-Commonwealth national. My understanding is that if you are on the UK electoral roll (A right Commonwealth citizens enjoy here), then it is a lot easier to access credit, presumably because you are easier to track and verify.

Good luck, I wouldn't let these little inconveniences dissuade you from taking the job. Mefimail me if I can help out with anything else
posted by TheOtherGuy at 3:40 AM on January 17

The first two comments are correct (you start with a fresh, blank credit history AND it's hard to get set up and going with a landlord and a basic bank account without some kind of verifiable financial history, being registered to vote, etc).

The good news is that, yes, your employer should be more than happy to write a letter to your bank saying "Anonymous is employed here and will be earning buckets of cash." And different banks have different hoops to jump through for immigrants who want to set up accounts. Some may want you to supply lots of paperwork, fill out several forms, and wait a week or so while they check out your history in the US. Others will be happy if you can simply show that employer's letter, any kind of official letter going to your UK address, and a bank statement showing that you have a reasonable amount of cash in a US bank account. (If you have a kind and trusting relative, they may be willing to deposit some extra money in your US account a few months before you relocate so that you look more respectable.)

If you're having trouble getting an account opened, your employer may be able to pull a string for you. If my memory is correct, getting a first account at Barclay's is rough, NatWest almost as much, but HSBC and Royal Bank of Scotland are more welcoming. But that's based upon impressions before the economy really started tanking. Even a nice bank will be reluctant to give you a credit card before you've been with them several months, and then it's likely to have a very low limit. You might have to find another provider that will want an annual fee and a high interest rate for the first 6-12 months. And your bank may only give you an ATM card (not a debit card) for the first several months as well. No chequebook either, but the good news is most landlords (and utility providers and whatnot) prefer direct-debit (electronic funds tranfer) straight from your account (and your employer will probably pay you this way too).

You'll probably have trouble getting a mobile phone at first too, and may have to get by with a prepaid phone. The good news here is that you're only charged for the calls you make (ie when people call you, it's free for you to answer and talk all you want, and if you run out of credit on your phone people can still get in touch with you). Again, different providers (and shops) will have different criteria for accepting or rejecting applicants.
posted by K.P. at 4:13 AM on January 17

As to which is the best bank to go with - this website tells you all you need to know.

Don't let the simple design fool you. This website was a lifesaver when I moved here.
posted by TheOtherGuy at 5:42 AM on January 17

as others have said above - you will be starting from scratch. this has some advantages (fresh slate) and disadvantages (no credit history for things like apartments and mobile phone contracts, etc.)

banks are HUGELY variable in their willingness to offer you accounts and credit. you may have a hard time, or you may get lucky. i had good luck with NatWest, others have found Lloyds easier. it seems to be dependent on the management at the branch, so you may need to just keep trying.
posted by wayward vagabond at 6:59 AM on January 17

it seems to be dependent on the management at the branch, so you may need to just keep trying.

This is extremely true. In my experience trying to open a bank account here, and the experiences of a few of my friends, you need to get around the Customer Service Drones to someone who can actually do something. The mid-level branch managers seem to have a fair bit of latitude.

HSBC has been very good for this.

If you do have trouble HSBC has a special current account called a Passport Account. It isn't free and the service is limited, but it's designed for new arrivals.
posted by generichuman at 7:14 AM on January 17

I'd check with your employer first. Mine had an established relationship with NatWest and made it easy(er) for me to open an account.
posted by vacapinta at 9:31 AM on January 17

you'll have no problems. get registered with the local council asap once you are in the UK so you're beginning to establish a credit history. get an account and have it in good standing for three to four months. then call the branch and get a credit card. use it wisely.

also get a secured card in the US. use it very little (less than 40% of the limit at all times!) and make regular payments on it. the only reason to have this is to have it bump up your credit record as you are in the UK so that you can come back and get a decent-rate card once you are back in town. consult bankrate.com for a decent offer and don't just take one that will instantly charge $100 in fees or something like that.

finally: get a full credit report from a place like truecredit.com and take care of all outstanding issues before you leave. they will need some time to disappear from your report anyway and this way you have less time to wait once you do come back. don't just go about this but ask in the forum on creditboards.com first. there are people who will tell you exactly what to do and what not to do. (this is seriously the best forum ever. it helped me a great deal. just lurk for a while and you'll learn a lot about dealing with credit and creditors.)
posted by krautland at 11:13 AM on January 17