Do Other Countries Have Credit Scores?

When moving abroad, you may wonder how credit scores function in other countries and whether your US credit history will accompany you overseas. This article delves into the existence and variations of credit scoring systems worldwide and offers guidance for those relocating abroad.
Do Other Countries Have Credit Scores?
Credit scoring systems vary globally, with each country adopting its own methods to evaluate creditworthiness. Here’s an overview of how some major countries approach credit scoring:
- Canada: Canada’s credit system closely mirrors the US system, using major credit bureaus like Equifax and TransUnion. Credit scores range from 300 to 900, with higher scores indicating better creditworthiness.
- United Kingdom: The UK employs credit reference agencies such as Experian, Equifax, and TransUnion. Each agency has its own scoring system; for instance, Experian’s scores go up to 999, while Equifax’s top at 700. Factors like payment history and credit utilization are considered, similar to the US system.
- Germany: Germany relies on the SCHUFA system, which collects data on individuals’ credit activities. Scores range from 0 to 100, with higher scores denoting lower risk. The system emphasizes negative records, such as missed payments, more than positive credit behavior.
- Japan: Japan does not have a standardized national credit scoring system akin to those in Western countries. Instead, financial institutions assess creditworthiness based on factors like income, employment stability, and repayment history.
- Australia: Australia utilizes a Comprehensive Credit Reporting (CCR) system, which includes both positive and negative credit information. Credit bureaus like Equifax and Experian operate in Australia, and credit scores typically range from 0 to 1,200.
Some countries, such as Japan, the Netherlands, and Spain, do not have formal credit scoring systems. Instead, they assess creditworthiness based on factors like income, employment history, and repayment records.
Does Your Credit Score Follow You Abroad?
US credit scores do not transfer internationally. Each country maintains its own credit reporting systems, and privacy laws prevent the sharing of credit information across borders. Consequently, when you move abroad, you’ll likely need to establish a new credit history in your destination country.
Without an international credit history, banks, landlords, and utility providers may assess your financial responsibility through other means. This can include reviewing proof of income, previous credit reports, and bank statements or requiring references from employers or previous landlords.
What to Do If You’re Moving Abroad
If you’re planning an international move, consider the following steps to facilitate your financial transition:
- Gather documentation: Collect important financial documents, such as your US credit report, proof of income, bank statements, and any reference letters that attest to your financial reliability.
- Research the local system: Familiarize yourself with the credit practices in your new country. Understanding how creditworthiness is assessed will help you navigate financial applications more effectively.
- Build credit in the new country: Establishing credit can involve opening a local bank account, applying for a secured credit card, or obtaining a small personal loan. Consistent, on-time payments will help build a positive credit history.
- Explore international credit transfer services: Some services, like Nova Credit, facilitate the transfer of credit histories between certain countries. Investigate if such options are available and applicable to your situation.
Get Started Overseas with Help from Greenback
Your US credit score won’t accompany you abroad, meaning you’ll have to establish a new credit history in your new home. By preparing for a new life, you can avoid interruptions and ensure a smooth financial transition overseas.
For reliable help with managing your finances while moving overseas, reach out to Greenback Expat Tax Services! Our team of expat-expert CPAs and IRS-enrolled agents is ready to answer all your questions.
Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.
Frequently Asked Questions
Can I Use My US Credit Score in Another Country?
US credit scores generally do not transfer to other countries. Each nation has its own credit assessment systems, and international privacy laws prevent the sharing of credit information across borders.
Which Countries Have Credit Score Systems That Differ From the US?
Countries without formal, centralized credit scoring systems (similar to the systems used in the US) include:
- Japan: Creditworthiness is typically assessed by individual financial institutions based on factors like income, employment stability, and repayment history rather than a standardized credit score.
- Netherlands: While the Bureau Krediet Registratie (BKR) tracks individuals’ debts, it does not provide a credit score. Instead, it focuses on assessing negative credit behavior.
- Spain: Like the Netherlands, Spain relies on systems that register credit histories and defaults, such as ASNEF or CIRBE, but these do not generate formal credit scores.
- Denmark: There is no national credit score system, but private credit agencies like Experian may provide assessments.
- United Arab Emirates: Although the UAE has the Al Etihad Credit Bureau (AECB), its system is relatively new and not yet as comprehensive as those in countries like the US or Canada.
- Singapore: Singapore has credit information through the Credit Bureau Singapore (CBS), but scoring systems here are not universally adopted in the same way as the FICO score in the US.
- Austria: While Kreditschutzverband von 1870 (KSV 1870) assesses creditworthiness, Austria does not use a formal national credit scoring system akin to the US model.
- China: China has a Social Credit System rather than a conventional credit scoring system. This system evaluates trustworthiness based on various personal, financial, and social behaviors rather than purely financial credit data.
These countries assess creditworthiness based on factors like income, employment history, and repayment records.
How Long Does It Take to Build Credit in a New Country?
The time it takes to build credit in a new country varies based on the local credit system and your financial activities. Establishing good credit can take anywhere from a few months to several years, depending on factors like payment consistency and the types of credit used.