Does moving house overseas affect your credit rating?
While relocating to a new house overseas will involve rearranging many personal details and possessions, your credit score shouldn’t be affected. That’s because it’s simply an indication of how responsibly you pay your debts when you owe money — and not about where you live.
As moving overseas is a big administrative process, you’ll be updating your personal details and address information in many places. This could lead to an error on the part of the institutions that track credit scores in Australia and internationally, such as: Equifax, Experian Dun & Bradstreet, Moody’s and S&P.
Happily, these are able to be corrected with little headache. So we often recommend that people who are relocating overseas make sure to notify these institutions of a change of address, or at least check their credit scores soon after moving overseas to catch any errors at the earliest.
Wondering more about credit scores and your upcoming move overseas? Read on for an overview.
Adding up your credit score
According to HSBC Bank Australia, a credit score is simply a metric that conveys your overall creditworthiness. Financial institutions such as banks can look at this number to understand how risky — or, hopefully, safe — it will be to lend funds to you. Generally, your credit score will be a number between 1 and 1,200. The score “begins” or starts from the first time you apply for some kind of credit, such as a loan or credit card, and shifts or adjusts as you go about your financial life. It is based upon information — such as repayment history — gleaned from:
Credit card companies
Other public records
Your new home and your credit score
A home loan is one of the most significant events in your financial life. Your credit score may significantly impact the loan you can take out for your new home — as well as your credit score going forward once you take out a loan.
Loan-making institutions will look at your credit score to gain a sense of how likely you are to pay in full, on time, each month. Individuals with higher credit scores — over 800, for example — may be eligible for more favourable interest rates. Individuals with lower credit scores — below 700, for example — may face higher interest rates because banks and other financial institutions look to protect themselves from risk.
Knowing this reality, it can be prudent to work to improve your credit score in the years or months leading up to your move overseas; pay monthly utility bills and credit cards on time so as to have the best score possible.
Looking beyond your credit score
Lenders do consider factors beyond your credit score before deciding if they will issue a home loan to you. Your existing debt-to-income ratio will be a factor in the decision to issue a loan as well as the interest rate. Also likely to be considered are your current income, your age, savings on hand and existing assets.
At OSS World Wide Movers, we are always happy to discuss any aspects of your move overseas. We understand that this is a stressful time and that you have many financial issues on your mind. If you’re uncertain about any aspect of your move, contact us today to answer any questions you may have. We want to help you get moving.
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