Wednesday, March 02, 2011

Establishing Credit Overseas is Not as Easy As You Think

Most foreign countries do not have access to run your credit report from your previous country of residence. Visit a bank in your new country of residence or ask around for a local financial advisor to get help to establish a credit history overseas.

Most foreign countries allow you to use your American credit card but the transaction history will not be reported on your foreign credit report. If you plan on moving back to the United States keep at least one American credit card account open.

American Express (Amex) stated that foreign customers may qualify for a U.S. AmEx card provided they have a U.S. address that AmEx can use to send the card or contact the cardholder if necessary. If you don’t have a credit score or a current copy of your credit reports, your income will be used to verify your creditworthiness.

If a customer lived in a foreign country and had a foreign AmEx card, that information can be used to consider credit approval. Once approved, you will incur foreign transaction fees for using a U.S. credit card in a foreign country. Here are 11 tips to help you establish credit in a foreign country.

1. You cannot use US credit history to establish credit history overseas, it cannot be transferred.

2. Foreign countries may not use SSN as a unique identifier.

3. Provide a hard copy of your US credit reports and letters of references from your bank and credit card companies.

4. Obtain a secured card.

5. Purchase overdraft protection which is treated as a credit product.

6. Open a foreign bank account.

7. UK and Canada use the same or similar type of credit reporting system as the US which may make it easier to obtain your credit report.

8. If your bank has an office overseas they can look at your US credit history and use that to approve you for an overseas credit account.

9. You can establish a credit rating within a year overseas. Open a charge card account like American Express and pay the balance in full each month.

10. Each country has their own credit scoring system: Austria uses Equifax and South Africa uses Experian.

11. Use a prepaid credit card.

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