Will my Canadian credit score follow me if I move abroad?
If you’re moving abroad, you may be wondering if your Canadian credit score follows you to your new country. Here is everything you need to know.
Planning to chase an adventure and try something new? If you’re off to jet-set to another country, you’ll probably pack up all the clothes you need, your favourite carry-on, and some extra shoes. But, the one thing you can’t bring abroad? Your credit score.
While having a formidableis great when living in Canada—yours is valid from British Columbia to P.E.I.—if you choose to pack up and leave, your credit score in Canada can’t actually follow you. Regardless of if you’re moving out to Albania or laying down roots in Zimbabwe, your credit score won’t be tagging along with your passport.
But, don’t be fooled: that doesn’t mean borrowing money will be easy or that you get a clean slate. If you’re unsure about where to start when you’re about to set roots somewhere else, we’ve got you covered.
##First off: what do credit scores look like around the world?
Just like currencies, cuisine, and even culture, different countries also do credit scores a little differently from each other.
- Japan, for instance, doesn’t have “credit scores,” but rather loans are given based on employment salary and length of service.
- The Netherlands operates on a system that will focus on “negative marks” like unpaid debts, which could be on your record for five years after your debt is finally paid
- France doesn’t have a major credit reporting agency, but rather, if buying a mortgage, borrowers need to show three months worth of bank statements to verify income
- Germany, on the other hand, has an interesting credit score system where everyone’s credit score starts upon renting their first apartment, opening a bank account, or paying a utility bill. Their score has you starting at 100, with the credit score going down over the years as your credit history grows.
- China’s credit score system goes even further to include a “social credit” ranking, where not paying debts, a poor driving record, or even smoking in a non-smoking zone, can impact what schools you can get into—or if you can purchase tickets for planes or trains.
And while countries like the United States and the United Kingdom both operate on similar credit score systems to Canada’s, the range of the score and how things are being reported can vary.
- Credit scores in Canada can range from 300 to 900
- Credit scores in the United States can range from 300 to 850
Thanks to all these discrepancies in credit score reporting—or lack thereof—systems, coupled with data protection laws, it’s no surprise that it’s hard to carry yours when you move overseas.
###Why can’t my credit score data just be transferred?
It seems like an easy transfer, no? If credit scores do exist in various countries, why can’t we transfer it over like credits between college programs or money from one bank to another? It really comes down to two reasons:
When it comes to credit reporting, the laws governing them can differ from country to country. Thanks to this, there may be an inability or restriction to transfer information across borders.
And as mentioned, different countries have different ways to handling and reporting credit scores.
As we saw in the list above, different countries focus on different factors. Outside of just the debts you might have or your credit history, in some countries, credit histories could be of one individual, while another has credit histories that combine everyone in the same household.
###Does debt follow me to a different country?
While your future home nation may not necessarily have your credit score on hand, Canada will still have the debts—if you have any—that you need to pay off.
If you actively choose not to pay off the loans you may still have in Canada, there will always be a chance debt collectors come after you. They can also try to file a class-action lawsuit against you if you refuse to stay on top of things.
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###What if I want to borrow money or buy property while living in a different country?
If your new adventure is only a temporary move, there’s no need to close all your credit accounts in Canada. In fact, it may be a smart idea to keep them active to keep building your credit history and score. Remember, most of your credit score is attributed to a credit history, so using your credit card while overseas could be a good way to keep that momentum going. A friendly reminder: don’t forget to notify your bank that you will be out of the country, so they won’t lock your card assuming it’s fraudulent charges.
And if you’re hoping to keep tabs on your credit while overseas, you can always do a soft check through ClearScore’s fast and free service, giving you your credit score report in minutes.
However, if you’re looking at more of a permanent situation, you might want to look into banking with a multinational company—so you can continue building your score internationally while being recognized in your new host country. But, if a multinational company isn’t available, consider starting from the ground up—get that new, and start building up your credit again, one purchase at a time.
##The Bottom line
So while you can’t bring your credit score with you overseas, don’t forget you can still bring your debt. Continue paying them off as you would’ve if at home—and if you’re swiping away in your new home, just remember, as always, to pay it off!
And if you want to keep track of your Canadian credit score back at home, it’s easy to check yours today! With ClearScore you can get yours in minutes for free, forever.
Tassie heads up ClearScore Canada. She lives in Toronto with her husband and two young boys. In her free time, she can be found at the family lake house or playing ball hockey.