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Do Other Countries Have Credit Scores?

do other countries have credit scores

Do other countries have credit scores? Is my score useful outside my country? You are about to find out!

You already know that building a good credit score is an important part on the path towards unlocking a world of financial opportunities – from securing loans with favorable interest rates to qualifying for dream apartments -, so you have probably asked yourself these questions before: “Do other countries have credit scores?” and “Is my score useful outside my country?”. Well, that’s what you are about to find out!

Many countries, like Canada, the UK, China, and Germany, use credit scoring systems, but they often differ significantly from the US model. Let’s delve into these differences and whether or not your credit score has any value when you’re abroad. Also, if you want to check out more financial tips on our website, you can click on this link!


Do Other Countries Have Credit Scores?

The answer is yes! However, while the US commonly uses FICO scores (developed by the Fair Isaac Corporation), other countries have their own credit bureaus and scoring systems. And these systems consider various factors when calculating your creditworthiness, or even the importance of each, that might differ from the ones used in the US. Here’s how some countries evaluate the scores:

  • Canada: considered a close cousin to the US system, Canada’s scoring system prioritizes factors like payment history, credit utilization ratio, and credit history length, similar to FICO scores in the US;
  • UK: the UK uses a credit scoring system has emphasis is on your electoral roll registration (proving residency) and your current debt obligations. Additionally, the UK has a shorter credit report window compared to the US, with negative information typically falling off after six years;
  • China: the credit scoring system is known as Social Credit System (SCS). It goes beyond financial creditworthiness and incorporates factors like social behavior and government interactions. The SCS aims to create a holistic creditworthiness picture, including things like bill payments, online behavior, and adherence to social norms;
  • Germany: for the country, payment history for loans, credit cards, and rent payments heavily influence your score. Germans also place a high value on a long credit history, with a proven track record of responsible credit management being highly regarded.

Is My Credit Score Useful Outside My Country?

There’s no such thing as a universal credit score. Your credit score won’t magically translate when you move to another country. International privacy laws restrict the sharing of credit information across borders. So, even with a stellar US credit score, you might be considered “credit invisible” when you first arrive in a new country.

How Can I Build My Score in a New Country?

Being credit invisible can make it challenging to secure loans, rent apartments, or even get a phone contract. So, how do you build credit in a new country? Well, it will depend on what has impact on that country’s system. But here are some general tips:

  • Open a local bank account: this establishes a financial footprint in the new country;
  • Apply for a secured credit card: these cards require a security deposit, but using them responsibly helps build your credit history;
  • Pay your bills on time: consistent on-time payments for utilities, rent, and phone bills all contribute positively to your credit score;
  • Become an authorized user on someone else’s credit card: if a friend or family member with good credit is willing, becoming an authorized user on their card can help you build credit history (but use this option cautiously and only with trusted individuals).