Moving to the UK and your credit score

Moving to the UK and your credit score Image credit: ID 131531737 © Sven Hansche | Dreamstime.com

If you’re thinking about moving to the UK, the first thing to remember is that you won’t have a credit report when you arrive – and if you do, it may be empty.

In terms of your credit score, you may be given one – but it may not be very good as you haven’t yet had the chance to prove you’re able to borrow responsibly.

Even if you’ve got a very healthy score and report in your home country because of careful borrowing and paying back any loans you might have, your credit score and report can’t transfer across – and this means that you’ll have to start from scratch.

Because you don’t yet have a credit score, you may find it hard to borrow money or get credit – this is because lenders see you as ‘high risk’. They don’t have any information on the kind of financial habits you have, and if you’re likely to make regular repayments.

It’s a chicken and egg situation as you need the opportunity to take on loans and credit to show lenders you’re responsible, and build up your credit score – it’s challenging, but if you follow the best practices we do, you’ll soon be on track.

Does your debt follow you if you move to the UK?

Even though your credit score won’t follow you to the UK, your debt can.

Although foreign banks and lenders don’t have the same clout as Government departments, they can still make sure you pay back the money you owe.

Always be open and honest with the companies you owe money to – explain that you’re moving abroad, leave them a forwarding address, and maintain regular contact with them.

This works in your best interests; if you leave a forwarding address, legal action can only be started in the country you currently live in. This means that the onus is on your creditor to reclaim the debt from abroad, unless you owe money to a company which also operates in the UK, such as an international bank. Don’t forget that several debt collection agencies operate internationally, so it may be just as easy for them to track you down and open communication with you in the UK.

How to build up your credit score after you move to the UK

Building up your credit score when you arrive in the UK can be a slow process, but it’s worth it.

  • After you find a home in the UK, get on the electoral roll if you’re eligible to. This gives creditors confidence that you are who you say you are. Remember to update your details on the electoral roll if you move – but try not to move too much, as this can impact your credit score adversely.
  • If possible, put household bills in your name and pay them by direct debit.
  • At first, the only credit cards available to you may be high-interest cards. If you use them responsibly, high interest cards can help you build up your credit. Only use them for purchases, use them sparingly, and pay off the full amount you owe every month.
  • If you soon find a shop which you love, you can look into opening a store card there to build up your credit – but as with your credit card, use them infrequently and remember to make repayments on time.
  • Open a UK bank account and start paying your bills, receiving your salary and transferring money abroad from this account. If you’re worried this could be tricky, you could find a bank in your home country which also has branches in the UK, and open a new account before you leave home.
  • Make sure you find employment and have a regular income which you pay into your UK bank account. This shows lenders that you’re more likely to be able to pay back any debts. If you can, it’s a good idea to try and find work in the UK before you leave your home country.
  • If you want to earn some extra money, you could always look into the possibility of finding a second job.
  • Don’t apply over and over for credit if you keep getting turned down. Every time a creditor says no, a record is added to your credit report, and if several unsuccessful applications are made, this will negatively impact your credit report. If you want to continue applying for credit, space your applications out – leave between 3 and 6 months between applications.
  • Finally, check your credit report regularly. This will show you any progress you’re making with your credit report, and you can make sure that you’ll minimise the risk of any mistakes being made which could impact your score. You’ll also be able to quickly spot any issue such as identity theft, and take care of them quickly.

What to do before you leave your home country and move to the UK

Even if you’re a student taking a gap year, your move to the UK is temporary or you’ll still have a family home when you move back, there are still some things you’ll need to take care of.

  • If you pay the bills in your home, let any utility providers know you’ll be moving. You should inform your electricity, water and gas providers, your mobile phone and TV licencing provider, and any other companies who supply a service which you won’t be using in the UK.
  • If you already have a place to live, make sure you tell your bank, your creditors and your family and friends your new address, and the date that you move in.
  • Get your CV ready to start applying for jobs if you don’t have a job lined up.
  • Apply for a National Insurance number and card.
  • Apply for an EHIC card.
  • Check to see if you need a visa and start your application in plenty of time.

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