credit ratings across nations
January 13, 2009 11:34 AM   Subscribe

I was born in the US, lived in Canada for ten years, and moved back to the States last year. While I was in Canada, I built up a solid credit rating- I had two credit cards, an unsecured line of credit with low interest (7%) and overdraft protection on my checking account up to $3,500. At one point when I was underemployed I built up some credit card debt, but I payed it off. Last year, when I moved back to the US for grad school, I got into a bad pattern of leaning on my credit cards and low-interest line of credit to pay for moving and start up expenses. This June, the world financial collapse coincided with one of my own- I was employed super part time, was making around $750 a month and was struggling to pay rent and buy $20 worth of groceries a week. I just couldn't pay my debt, and I paid very minimally, then not at all. I know I probably should have called the bank and tried to work something out, but what can I say- I panicked and froze. Currently, my total debt load is $14,000 on the line of credit, $3,700 on the overdraft and $1,400 on my Visa.

I've worked hard to hustle up jobs, and currently I am no longer as financially destitute as I was. I also have just now been taken to collections. I have an appointment with Canadian credit counseling (the reputable nonprofit that everyone goes to) on Thursday. I plan on amalgamating and paying off the debt.

My question is: how much, if at all, will my credit raring in Canada affecr my US credit rating? So far there seems to be no bleed-through- when I applied for a cell phone a year ago, with excellent credit in Canada, I was told that I had no credit rating in the US- not a bad one, just a nonexistent one. I told them I had great credit in Canada, and was told that the two systems don't relate at all, as the identification markers (Social Security Number and Social Insurence Number) are different. So I'm wondering, if that's so, if it might be so in reverse- that I could maintain good credit in the US even if mine in Canada has taken a hit. I'm not planning on taking out any new credit cards or debt, have worked up a budget, and all the good stuff- but I'd like to know that I could rent a car, not be screwed if I moved and am applying for a new apartment, etc.

Also, I've been told that the credit counseling service may not be able to help me, as I don't work one full-time job- I'm a performer and grad student with several part-time jobs, and sometime chunks of money from performance gigs, grants, etc. So I'm also wondering- given that they charge a fee, might it be better for me to work out my own deal with collections? I can defintiely pay off the small Visa ballance in one chunk this month, and can pay perhaps $500 a month towards the other two after that. Not great, but I could have this debt paid in three years if I stick to it.

Finally, does anyone know of any good budgeting software/budget plans for folks who are self-employed who don't have a regular paycheck? It's been a struggle for me to budget when I might only get $1,000 one month from my regualr small gigs, but then get $3,500 in one chunk from a university performance. Most budget info seems geared towards folks who have one, or two, steady jobs.

Thanks in advance!
posted by anonymous to Work & Money (6 answers total) 1 user marked this as a favorite
Figure out exactly how much your bills are and put it in a checking account that is only for bills.
And instead of credit cards, why not student loans?
posted by k8t at 11:43 AM on January 13, 2009

To answer the first question, basically your US credit rating and Canadian credit rating don't influence each other in any way -- you could have excellent credit in one country and terrible credit in the other, and they won't be connected (for now anyway -- you never know if the systems might get tied together in the future). In some cases, such as when applying for a mortgage, it can be possible to convince some banks to look at your credit rating in the other country if you have no credit history locally.
posted by Emanuel at 12:10 PM on January 13, 2009

I moved from the US to Canada in 2007, and my excellent US credit rating did not follow me and I've had to work over from scratch. Credit simply isn't translatable across the border apparently, but a banker friend of mine told me that banks will look at your US credit when it comes to getting a mortgage. Not sure if that's really true, or under what circumstances, but there you go.
posted by the dief at 12:19 PM on January 13, 2009

the dief gave exactly the answer that I would have given if I got here first, except that I moved to Canada two years earlier than he did. There was zero relationship between the two credit ratings and I had to start over from scratch.
posted by kate blank at 12:38 PM on January 13, 2009

Another data point here agreeing with the commenters above. I moved from the US to Canada in 2003, then moved back to the States in 2005. I had great credit in the US, but I still had to start from scratch in Canada. My Canadian credit rating did not follow me back to the US when I left. The two are completely separate (for now, at least).
posted by velvet winter at 9:13 PM on January 13, 2009

Nthing separate but equal credit systems in different countries. Until consumer credit guidelines, collections procedures, and credit rating systems are absolutely uniform across all countries, your credit in one country will stay in that country and not go with you (good or bad) when you move back and forth over borders.

If you had business with one company in the US and Canada, though, that company could check your payment history in both countries. Sounds about right for a mortgage, because so much money and risk is involved... but I doubt they'd go to that kind of trouble for a credit card account.
posted by Grrlscout at 11:34 PM on January 13, 2009

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