Credit in foreign countries

September 30, 2005 6:33 AM

In considering moving away from the US, I have some questions about the process of foreign credit. In European countries (and a country-by-country breakdown would be fine), how important is your US credit record to you gaining credit there? Does credit work the same way (credit cards, etc)? Can you generate credit in foreign countries with a poor credit record in the US? How would you go about this?

I'm specifically interested in Canada, Switzerland, Italy, the Netherlands, Australia, Ireland and/or Scotland, and Spain.

posted by arimathea to Work & Money (10 answers total)

Credit systems are country-specific. You have NO credit record in any other country. This may seem good or bad to you, depending.

Maintain your U.S. credit card and bank account while relocating. You will have to build credit in the new country from scratch, i.e. deposit 1000 currency units in a term deposit, get a 1000 currency unit limit credit card secured by the deposit, prove you can pay it off..... even if you have a Platinum Diamond MegaCard in the USA.
posted by jellicle at 6:39 AM on September 30, 2005

I don't have a direct answer, but I do know that when moving in the opposite direction - from Europe (the UK) to the US - my credit history in the UK was worthless in the US. I had to start building a history all over again (major pain in the arse, that was). So, I suspect, worst case is that you'll be a credit "ghost". As far as how things work goes, I'd say there's more similarities than differences with respect to consumer credit mechanisms (cards, personal loans, car finance deals, etc). IANAL, obviously.
posted by normy at 6:45 AM on September 30, 2005

(1) DO NOT give up your US bank account and credit cards when moving. Unless you are relocating forever and ever and you are absolutely sure about that, hang on to them. As someone who has lived and worked abroad, I can tell you that the logistical advantages of a home-country bank account are significant.

(2) There are *some* banks with big US branch networks (e.g. HSBC) that have consumer branches all over the world. You might want to consider opening up an account with such a bank *before you move*; in this case, your standing in the US may help you overseas, and you might be able to set up business and establish your credit more easily by dealing with a branch of that bank in your new location.
posted by enrevanche at 6:50 AM on September 30, 2005

I would agree with the earlier comments. I have went from the UK to Oz etc and found it easy enough to open basic checking accounts but getting a credit card (even with a low limit) is nigh on impossible until you've built up a base. Keep your local cards whilst you try and build it up.

My brother in law is from Iceland; when he arrived in the UK he had to jump through all sorts of hoops to get a card even though he was an investment banker from a reputable firm and had money to burn.

Banks err on the side of caution regarding this as they have had their fingers burned too many times.
posted by ClanvidHorse at 7:31 AM on September 30, 2005

Simply moving from one EU country to another is a pain. The 'war on terror' and 'war on drugs' have also made it a greater pain to transfer funds between countries or open accounts in a new location.

That being said, it seemed to me that credit wasn't that difficult to get so long as you could show a meaningful employment contract. (UK and Germany)

In South Africa, as temporary residents, we would be required to make a very high (40-60%) down payment to obtain a mortgage. Simple solution, we rent. I have no idea if similar things are done in Europe, as we didn't look in to buying there.
posted by Goofyy at 8:07 AM on September 30, 2005

While I know lots of people who have moved from Canada to the US, I know very few who have moved from the US to Canada.

That aside, I believe that, in general, your US credit rating has little bearing on your Canadian credit rating. Once you move up here you may have some difficulty securing a credit card and probably couldn't get a mortgage. This is definitely true of Canadians moving to the US, so I don't see why it wouldn't work for the reverse trip.

On the other hand, it seems like everyone and their dog has a credit card in Canada. I had one, with a low limit, while in University, with rather little income. I'm sure that if you open a bank account and establish a permanent address that you'll be able to get a basic bank credit card and begin establishing a credit record.

Most of the Canadian credit reporting companies (TransUnion, EquiFax) are affiliated with a US counterpart, so it's certainly possible for them to get your US data.

American Express apparently has a service to help with this. But if you have bad credit, that's probably not what you're looking for.
posted by GuyZero at 8:27 AM on September 30, 2005

I used to sell phones for Telus Mobility in Canada, and they had a way to check your US credit rating if you were moving from the States. It took a little bit longer (hours instead of minutes) and they would usually insist that you either had a Canadian credit card on file or had lived in Canada for at least 6 months - otherwise would ask for a prett hefty deposit.
posted by jeffmik at 9:19 AM on September 30, 2005

I agree with the other comments: your US credit history is not considered here (in Switzerland). I have one hint for you if you consider moving to Switzerland: Don't open an account in one of the large banks (UBS or CS) - instead look for a small local bank (the Raiffeisenbank are all local) where the people behind the counter will get to know you personally. Open an account, put some money in (or better have your salary automatically transferred to it each month). When opening the account, you request a Maestro-Card (formerly known as EC-Card). This is not a credit card, because the money is directly subtracted from your account. Your bank might give you some credit on it, depending on how regular your income will be transferred. You will be able to get cash at ATM in all European countries (and now even the US) with this card. In most shops in Switzerland it is possible to pay with the Maestro Card. It is also a lot cheaper than a credit card.
posted by m.openmind at 10:39 AM on September 30, 2005

When my friend moved from Canada to the US, she had to re-establish her credit. When she moved back from the US to Canada a few years later, she found that her Canadian credit had disappeared and she had to start over. However, in both cases, she just had creditors check her credit in the appropriate country, instead of just in the US or Canada. That way, even though the credit didn't show up on her credit report for the country in question, the creditor was satisfied enough to allow for a lease, loan, credit card, etc.

Before hanging on to your US bank accounts, check with the IRS (or whatever -- I'm Canadian, so I'm guessing). I know that if Canadians move out of the country but maintain Canadian bank accounts, they are considered to still have ties to the country and are thus subject to taxation. This may be the same for US citizens who leave the US. If that's the case, maybe you could just hang on to a credit card or something like that.
posted by acoutu at 10:52 AM on September 30, 2005

My girlfriend works for a relocation service in Canada, and regularly has to deal with people moving to Canada and having to rebuild their credit history. If you have zero credit history in Canada then credit card companies/banks will only give you a card if you give them a deposit equal to the credit limit, sometimes more. It is worth mentioning that she has only dealt with people coming from overseas, and not from the USA.
posted by furtive at 9:45 AM on October 1, 2005