I have been fielding many questions lately about how weak or poor credit may affect someone moving to another country and how their credit may impact them receiving a Visa in another country.
Also, does there credit score follow them, especially if they have poor credit or are leaving debts behind them.
As a species we travel about the globe, and many of us travel more than others. We may not just go to visit a country and see the sites, we go to live there and stay for a period of time. Using myself as an example, I moved to another country and have lived there for over 10 years and probably for the remainder of my life.
Even if we move to another country for just a few years, we immerse ourselves in the country and its culture, and also its financial ways. As for many of us to live in another country, requires us to have a job there.
Once a person is employed in another country, aspects of living there take on a whole new realm. You get paid, you need to pay bills, rent, etc, and you now enter the personal financial world of that country.
And one of those aspects of personal finance is credit, getting some form of credit, such as a credit card, or automobile finance. Not many of us can just afford to buy a car, so we need a loan.
Of course when we move to another country, we become an unknown entity credit wise. We have no credit in that country.
Getting credit or establishing a credit history in a new country can be a challenge, and there is no rules to follow or one way to do this.
I know from experience you can take two different people, have them move to a new country, and one may receive a premier bank account and a credit card, and one may not. There are many factors involved.
It may depend on income, what wages you are earning, the nature of your job, what references or documents you can show to prove your past financial history, etc.
There is no hard and fast rules here.
However, as we have seen, by some means, ex-pats get credit in some other country outside the UK. They then may decide to move back to the UK, or maybe forced to move back due to the loss of employment.
At this point a person may or may not be able to service any debts or accounts they have established in the country outside the UK, when they return to the UK.
This is where people get worried, returning to the UK with debts in other countries and can those debts be collected.
As I have previously stated and written about, debts in other countries in some instances if outsourced to an agent in the UK, and in the terms and conditions have a “non-jurisdiction” clause, can be collected here in the UK.
Also, if a debt from another country is sold to a collection agency here in the UK, it can be collected here in the UK.
In both these instances, the debtor has all the resources available to then in the UK to repay or discharge the account(s). In addition, they are afforded all the rights and protection from the debts in the UK and EU, but not outside of these areas.
The EU Referendum vote could change this.
So if the debts may be transferred or sold on, what about the credit history or credit score from another country.
Credit Scores Following You When You Change Countries
Just as we discussed moving to another country and being an unknown entity credit wise, the reason for this is due to the fact our credit histories from one country do not just automatically follow us to another country.
Good or bad credit scores, remain on the credit history for the country in which they were originated.
According to James Jones, Head of Consumer Affairs at Experian.co.uk, when questioned about poor or “adverse” credit in the UK following someone to Spain he states:
“If you move to Spain your UK credit history will not be transferred to a credit reference agency there. Furthermore, credit reports are not generally available to lenders across national borders, so if you approach a lender based in Spain it cannot contact a UK credit reference agency and ask to see your UK credit report data. There is, however, a possibility that if you approach a lender that is based in both Spain and the UK, it could seek your permission for its UK arm to run a credit check here and then use that to help inform its decision to lend in Spain. Importantly, credit checks can only be carried out with your permission, so if this latter scenario becomes a prospect you should be made aware of it in advance, giving you the opportunity to consider your options. Of course, you really should repay your DMP before taking out new credit elsewhere, whether in the UK or abroad. Assuming your DMP has been set up by a third party provider, you should have committed to keeping them informed of any changes to your personal circumstances, particularly any that affect your ability to repay your existing debts as quickly as possible.”
So to answer the age old question, does my credit and credit score follow me to another country, the answer is no.
But as we discussed, this also can cause issues as you have no credit rating in the new country in which you reside.
So just as your credit history in the UK for example may not follow you to Spain, Dubai, or America, or Australia, any credit histories or ratings you may have established in these countries does not follow you back to the UK.
This can also be an issue if you move outside the UK for extended periods of time. Everything drops off your credit history here in the UK after six (6) years. If you leave the UK, and are not credit active here, for a period of more than six years, it is possible should you return you no longer have a credit history here. Which could make obtaining credit back here in the UK difficult.
And no I am not speaking about a credit card, but a Visa to legally stay and live within a country that is not where you were born, or a naturalised citizen.
Most countries require some form of Visa in order to live and work there more than for just a holiday.
In the process of getting a Visa or even just entering a country, many people are concerned what will happen if they have debts in other countries or a poor credit rating.
If you are just going to another country for a holiday or short stay, having poor credit here in the UK is not an issue. Even if you have left the UK with open unpaid accounts, lived in another country and decide to move back to the UK, the credit and accounts are not an issue. You are allowed to return.
It was reported that some holiday makers leaving the UK who owed council tax or TV licence fines,
were being stopped from travelling to pay those fines. I have not heard much more about this.
On the whole travelling to another country for a holiday, or returning to the UK owing debts in the UK or in other countries is not going to be a problem.
But what about obtaining a Visa to stay and live in another country??
Each country can have its own set of rules and guidelines for being approved for a Visa to stay there.
Here in the UK the process and application does ask about financials for some Visa’s, but not to the extent of asking about credit history or debt.
In being approved for an Indefinite Leave to Remain and also for UK Citizenship there is a question about civil judgments.
This does not mean your Visa or citizenship would be denied based on this if you were to have a judgment.
For UK citizenship there is a “good character” requirement.
This usually refers to any criminal activities, and can include in a grey area some financials, but no debt or credit questions are asked.
Cars Left Behind
It’s like the Rapture for cars and vehicles, they got left behind.
What I am referring to is the hundreds if not thousands of cars left behind in Dubai.
Dubai has very strict banking and debt laws, which in essence state if you owe a debt and default on that debt, a warrant can be issued, you can be arrested and imprisoned.
Many ex-pats from the UK and other countries that go to live and work in Dubai require Visa’s to stay there. The Visa’s are for two years and are connected or attached to their jobs/employers. Should they lose their job, they lose their Visa’s, which means they need to leave the country.
If they have a car on finance, a person may as well just leave it behind.
If someone were to default on any debts in Dubai, and are not a UAE citizen, they are better off fleeing the country, in which again, they may as well leave their car behind.
So credit scores do not follow you from country to country.
Debts/accounts you may owe in another country, may follow you if sold onto a collection agency here in the UK, or assigned out to an agent if the original contract allows collection of the account outside the original country.
,I have been fielding many questions lately about how weak or poor credit may affect someone moving to another country and how their credit may impact them receiving a Visa in another country. Also