MsPrufrock

Sorry to add this to the thousands of credit-related threads on here. I believe myself to be in a unique and frustrating situation - I am a USC, and my husband is a UKC. I moved to the UK with my husband 8 years ago after graduating from university, and as we were intending to reside in the UK indefinitely, closed my bank accounts and more or less severed all financial ties in the US. I didn't have much anyway, as I was just a poor student when I lived there. Back then, we paid for everything in cash, believing credit to be quite a negative thing - who wants to have that looming over you all the time?

Fast forward to now, and I have gotten a job in the US which I will start in a week. As I did not have credit built up there, I am going back to a non-existent credit report. However, whilst living here, we have had a mortgage, credit cards, etc and maintained a very good credit rating. It seems like none of this matters when moving back to the US. A bit of a tangent, but in today's modern world, how is a credit report not transferrable when you have a Visa/Mastercard/American Express? How can UK records of credit card payments and thus built-up credit not carry over to a US credit report? That might be immensely ignorant of me, and perhaps I'm oversimplifying things, but it baffles me.

So am I right in thinking I may as well be a UKC given my position? I'm feeling very stabby about the US system at the moment and would welcome any wisdom and advice!

Rete

I don't understand why you are feeling shabby about being a USC. What does your credit rating in the UK have to do with your US citizenship?

If you thought about it rationally why would your UK credit rating have any bearing on your US credit rating? It is pertinent to the UK only because that is where you were earning your income, taking out loans, buying on credit and repaying all that you borrowed.

Your UK income will not continue when you relocate to the US. You may have employment lined up but there is no way to knowing if you will last in said employment. What income source would creditors have to base their decision on making you a loan be based on? Certainly not longevity of US employment. What you did or didn't do in the UK has no bearing on what you will or will not do in the US.

Being a US Citizen does not give you the right to instant credit; just as it doesn't give you the right to bring your spouse to the US to live and work without the proper visa. Every young person who is taking their first employment has to do exactly what you are going to have to do = build a credit history.

Englishman in Eugene

It's not being a USC or UKC that determines your credit rating, but your financial behaviour in the country. Unfortunately since you burnt all your financial bridges in the US 8 years ago, you have no financial behaviour in the US for credit agencies to base an opinion on, so you now have to start rebuilding a credit rating.

It is unfortunate that in the "Global Economy" credit ratings are not also global, but that's the way it is right now. I'm amazed at how backwards the US banking system feels after the UK, but I just have to live with it. At least they now have chip & pin. which wasn't the case when I first visited the US in 2004.

I agree with you that buying on credit is really a stupid thing to do, and if you don't have the money to pay for something you shouldn't buy it. Paying the interest on credit is killign many families financially, and the bankers are laughing.

Moreover, since easy credit enables people to buy things too easily, they buy things they don't need, don't enjoy the pride of true ownership (not just owning something the bank is lending to you), and they buy yet more stuff to try to boost their feelgood factor, thus spiralling downwards into debt. Then they see and advert saying "too much stuff, not enough space" and buy space saving solutions, whe the advert should say "too much stuff, why on earth did you buy it?"


As a UKC fresh to the UK I am trying to build a US credit rating using a Bank of America credit card with where I deposited $500 to start with, and have a $500 limit, so there is zero risk for BofA. Every time I use the card I immediately transfer money from my current account to clear the card, so I pay no interest. In six months to a year I'll get my $500 back and it'll revert to a normal credit card.

That said, I still have no intention of ever paying interest on a credit card...

MsPrufrock

I'm not entirely sure the patronising tone of your reply was needed, but thank you for the stern telling off.

MsPrufrock

Thanks for your reply. What I have emboldened within your post is what I don't understand - why would one want to have loads of credit if they don't have to? We are in a strong position to pay for things either in cash, or at least with a minimal loan (in the case of a house for instance), but instead we'll be faced with massive rates in the view of building credit. Bah.

The BoA idea is a good one - I'll bear your tactic in mind!

Longy

You mention American Express - do you have one? If so they can transfer you card across? This will give you a bit step up.

Englishman in Eugene

I agree, if you don't need to buy things on credit, why do you need a credit rating? Of course you don't, if you can pay cash in full for everything, including your new home.

My wife has a very good rating because she paid off all her US debts promptly, including her student loans. Most of her debts she paid off whilst living and working in the UK. She actually had to be careful not to pay them off too quickly, to get the best financial benefit.

When we had financial advice on a possible mortgage in June 2009, the advisers said that although it was a good rating, it lacked depth (because she paid promptly) and breadth (because she had never had that many debts to begin with). Of course I had no US existance, and no means of getting a US mortgage at all, so any mortgage would be based solely on my wife's circumstances. The result was that any mortgage we got (to buy the house we were interested in) would cost us about $1500 a month to repay, of which about $5 would pay the capital, the rest was interest. We decided NOT to take out a mortgage. Instead we delayed our US house purchase until after we had sold our UK house, when we could pay cash in full and avoid paying any interest at all.

In other words, your credit rating is based on your history of paying interest on previous loans, and is majorly affected by your current income. It doesn't matter a jot that you may have money, lots of money, in the bank, and even less do they care about capital assets held outside the US.

Jerseygirl

You'll have the same experience with car insurance...you will be classed as a new driver.

fatbrit

If you didn't naturalize as a UKC while you were there for 8 years, that's certainly another mistake you made.

On your credit issue, your situation is nothing unique. Just use the advice given to those frsh off the boat. Your US citizenship is irrelevant to your dilemma.

AmerLisa

I was going to say the same thing. I wish I had taken the time to do my UKC, while I was there. We got in a rush (house selling, packing, etc) and let that opportunity go. What a pain it would be should we ever decide to go back.

As far as the credit issue, we arrived back (I'm the USC, hubs is the UKC as well) with no credit. We were able to buy a house a little over a year after arriving, so all is not lost. Transferring the American Express I'm sure will help. Thankfully we had enough cash behind us for deposits, etc. We didn't come to jobs, at least you have that in your favor.

Best of luck

lansbury

Where have you found that. Things must be much more advanced in Duckland than they are in Portland.

nettlebed

Must be an W. Central Oregon thing: never seen hide nor hair of it in WA...

avanutria

Well, all the supermarkets have you put/swipe your card in a device and then enter your pin; if that's not chip and pin then it's something close enough for me...!

Duncan Roberts

So next time my son has an asthma attack and I have to use a credit card to pay for the ER visit, medication and medical equipment because I haven't got the cash due to other healthcare bills and unexpected problems like forced income reduction I should just ignore it? Sounds like a good plan.

Credit isn't used just for getting credit cards or loans. Utilities use you rating to allow you service, insurance companies use your rating to determine your policy cost, even employers can to use it to assist with employment eligibility for certain jobs.

fatbrit

It's not chip and pin because you can always opt to sign instead.