What to know about credit when accepting an international relocation assignment
Moving overseas is an exciting adventure that often comes with various logistical challenges – one crucial aspect to consider when relocating abroad is how your credit will be affected.
Understanding the do’s and don’ts of credit when moving overseas is essential to ensure a smooth transition and financial stability. This blog post will explore the key factors to consider regarding credit during an international move.
The Do's of Credit When Relocating Internationally
1. Notify your creditors and financial institutions
Before leaving your home country, inform your credit card issuers, banks, and loan providers about your upcoming move. This proactive step will help prevent potential issues or losses with your current accounts.
They can offer valuable advice or alternative solutions for managing your finances abroad. They also help you figure out how you can process credit card payments while abroad.
2. Research the local credit system
Countries have different credit systems, and your credit history might transfer slowly. Take the time to understand your new destination’s credit reporting agencies, scoring models, and processes. This knowledge will help you establish credit in your new country effectively.
3. Maintain your existing credit relationships
Try to maintain your current credit relationships, such as credit cards or loans, even when you move abroad. A long credit history can positively impact your credit score and make it easier to access credit in your new country. Consider keeping at least one credit card or account active, using it periodically, and paying off the balance to demonstrate financial responsibility.
4. Establish local credit
Once you arrive at your new location, start building your credit in the local market. Open a bank account, apply for a local credit card, or consider obtaining a secured credit card if you cannot qualify for unsecured credit initially. Timely payments and responsible credit usage will help you establish a solid credit history in your new country.
Click here to find more about which countries use credit reporting.
The Don'ts of Credit When Moving Overseas
1. Close all your existing accounts
Closing all your accounts in your home country can negatively impact your credit history and credit utilization ratio. Instead, consider keeping some accounts open to maintain a connection to your home country’s credit system. This can be especially helpful if you plan to return in the future.
2. Rely solely on cash
While it may be tempting to rely solely on cash transactions when you move overseas, having a mix of payment methods is crucial. Responsible credit card usage can help you establish a local credit history, gain rewards, and provide additional security and protection for your purchases.
3. Ignore currency exchange rates
When using credit cards overseas, be mindful of currency exchange rates and potential foreign transaction fees. Some credit cards offer favorable exchange rates or waive foreign transaction fees, making them more suitable for international use. Research and choose the best credit card options for your specific needs.
4. Overextend your credit
Moving to a new country can bring unexpected expenses and financial challenges. Avoid overextending your credit and accumulating excessive debt. Create a budget, track your spending, and ensure that you understand your financial obligations and capabilities in your new environment.
Final Thoughts from GMS
Moving overseas is an exciting opportunity, and managing your credit effectively is crucial for a successful transition. By following the do’s and don’ts of credit when moving overseas, such as notifying your creditors, understanding the local credit system, and responsibly managing your credit, you can establish a solid financial foundation and ensure a smooth integration into your new life abroad.
For more information about international relocation services, set up a free consultation with one of our business development managers. Global Mobility Solutions (GMS) is the industry leader in providing companies with global mobility programs.
We're Here to Help! Request a Courtesy Visa Program Consultation
Properly managing a visa and immigration program involves meticulous coordination, precise communication, and worldwide interaction with government agencies, corporate personnel, and relocating employees.
At GMS, we provide you with peace of mind in knowing your mobility program is fully compliant and being managed by the best in the industry.
Request a no-pressure, courtesy consultation from a GMS Mobility Pro. We’ll be in touch within 1 business day.
Christina Urrutia
Christina oversees Global Business Development for LATAM markets. Christina brings with her over 15 years of experience in helping clients build mobility solutions in a variety of roles such as Relocation Counselor, VP of Global Sales, Manager of Business Development and Strategic Partnership Manager. Christina holds key industry certifications including Global Mobility Specialist with a talent accreditation (GMS-T) and Certified Relocation Professional (CRP) designation from Worldwide ERC. She also holds a 120-hour English as a second language teaching certification (TESOL) and has completed over 400 class hours helping students achieve their fluency goals. Christina’s passion for Duty of Care and Employee Wellbeing has led to countless speaking engagements within the industry and has fueled her own networking group, Women of Global Mobility to inspire and encourage the growth of Women within the industry.
