If you’re planning to move abroad or are new to the UK, you’ll likely be dealingwith all the administrative headaches that come with it. These can include sorting out aplace to live, a new job, visa requirements and other documentation. One crucial concernthat you may have is whether you will be able to get access to credit in your new country.
Using credit isn’t just about getting a loan, it can affect your ability to access manydifferent types of financial products. Credit cards, bank accounts and direct debits cangive you access to essential products and services like housing, utilities and transport.They will usually all depend on a credit check.
Your credit history will determine if lenders andservice providers are willing to give you credit. But, what happens to your credithistory when you move abroad?
Credit history when moving abroad
Your credit report is compiled by a credit reference agency like Equifax, that will gatherinformation on you and your finances. This information can then be used by lenders as partof their decision on whether to give you credit. They will only collect information on youractivity in a particular country, so if you move to another one, you’ll essentiallybe starting from scratch.
This is partly due to having different data protection laws in different countries, and alsothe fact that agencies will hold information that relates to addresses in that particularcountry.
Does debt follow you abroad?
Although your credit history may not follow you when you move abroad, any debts you owe willremain active. It will be difficult for lenders to take legal action against you ifyou’re living in a new country, but it is not impossible for them to try and recoupthe debt.
If you plan on moving back to the original country, those debts will still apply and mightalso lead to CountyCourt Judgements (CCJs) while you were away. If you have assets in your country oforigin, a debt collector may try to secure a debt against them on behalf of the lender.
The chances of the debt following you abroad will also depend on who you owe money to. HMRevenue & Customs (HMRC) will have greaterpowers to reclaim unpaid debts than other institutions.
Rebuilding your credit history
If you’re moving abroad temporarily, for example, for a couple of years, it might notnecessarily be the case that you need to close all of your accounts. If you can keep themopen and active, they’ll continue to be part of your credit history. This includesbank accounts and credit cards. If you are using a credit card abroad, however, you shouldnotify the card issuer to avoid any problems with suspectedidentity theft.
If you have an account with a multinational company, this may make it easier to open a newone when you move abroad. So, it’s worth looking into what your current bank offers interms of international services.
If you do have to start with a blank slate, then you’ll need to follow the same stepsas someone who has never had a credit history. You can learn more in this article about gettingcredit with no credit history.
If you’re interested in checking details of your credit history, you can get onlineaccess to your EquifaxCredit Report & Score, which is free for 30 days and £14.95 monthly followingthat.
This article was updated on 23rd March 2022; all information was correct at the time ofwriting.
