- Firstly understand the credit score from back home. Most are similar whether the US, UK, Europe or Australia. This articlegives a broad overview of several systems.
- Do keep at least some credit cards and bank accounts open from home.
- Close any extra accounts slowly, not as a clump at once since this might seem suspicious to credit agencies.
- You can even let the credit agencies know you are overseas. This can help prevent or reduce the risk of identity theft. Did you know that people can apply for credit scores by say pretending to work at a bank? Identity thieves can use this information to identify people with sleeping credit cards and target people that
- Don’t change you address to your overseas location. That sounds counter-intuitive but some banks close accounts if you move overseas. It can also affect your credit score. So get a mail forwarding service or get a trusted relative or friend to send you scanned copies of your statements.
- Don’t stop using your accounts or credit cards. An account that is not used, at least once per month (say for dinner or flight booking, or health insurance payment) is not much better than no credit card at all. Agencies and banks give points to people who can manage their credit – not people who ignore it all together.
- Don’t – give up when you return home – you can influence your credit score. You might be able to get a credit score from the country where you have been living, and then inform credit agencies when you return home. This can help reduce the impact.
So how does China’s credit scoring system work? Well it doesn’t really have one, but it does have something similar according to this commenter.
Whether you are a long term or a short term expat, it doesn’t hurt to keep a good credit score back home (or even just having a credit score). My American friend had lived in Asia since graduation and his total lack of a bank account or score was a huge barrier. Even if you have no immediate or foreseeable plan to return home, it never hurts to be prepared.
Want to learn more? Join our private LinkedIn Group that shares the inside story.