Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Credit score - how to get one when moving UK to USA

Credit score - how to get one when moving UK to USA

Old Apr 26th 2013, 10:22 pm
  #1  
Just Joined
Thread Starter
 
Joined: Apr 2013
Location: Tucson, Arizona, USA
Posts: 1
missingtheseaside is an unknown quantity at this point
Wink Credit score - how to get one when moving UK to USA

Having spent a long time before we moved stateside trying to research this topic, and gaining some useful info from old posts on this site, I felt it might be useful to share what I have subsequently discovered.

Misconceptions:

1. It is impossible to have a credit score on arrival
2. There is no way easily to get a credit card
3. You cannot unwittingly significantly damage the score
4. The banks understand the scoring system

Why do I say these?

When we arrived in the US, we opened a bank account (I had SSN from work) and asked for a credit card. They gave me one with $300 credit, as I had no credit history. Not much use.

I then made two startling discoveries.

1. If you have an amex card in the UK, Amex will automatically give you an amex card in the US (http://www.americanexpress.com/globa...ed-states.html)

2. THIS CARD COMES WITH THE CREDIT HISTORY OF YOUR UK AMEX CARD!

We had had a free Sainsburys/nectar amex for ten years, so went from no credit history to an Equifax score of 800 overnight!

BEWARE HOWEVER.

We also learnt that it is very easy to damage your score unwittingly, if you don't manage your credit card use. This may sound obvious, but the nuance is not. I have always paid off my credit card in full each month, so have never defaulted. Yet you can still damage your credit score by using your card in certain ways.

Key points that I learnt (the hard way) and via communication with equifax:

The key factor determining the impact of your credit card on your score is the ratio of amount of use divided by the total available credit (i.e. credit card limit). So if you use $500 of your $2000 limit, your use is

500/2000=25%

Now, what the credit card companies and banks don't warn you is this: if you go over 45%, it sends your score right down. So when, one month, our own usage went to 64% of our available credit, our score dropped down overnight to by 120 points, despite the fact that we paid the card off, in full and on time. This could not have come at a worse time, as we were looking to arrange a mortgage that month.

So, in summary:

1. If you are still in the UK, get an Amex card ASAP.

2. When you begin using your cards in the US, always make sure you pay down your credit card to under 25% prior to the monthly statement coming through. (Apparently, and this has not been verified to me, you need to show SOME usage of your card for the score to be impacted positively.)

Good luck!
missingtheseaside is offline  
Old Apr 27th 2013, 4:47 pm
  #2  
Lost in BE Cyberspace
 
Michael's Avatar
 
Joined: Jun 2008
Location: San Francisco Bay Area
Posts: 10,678
Michael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond repute
Default Re: Credit score - how to get one when moving UK to USA

Originally Posted by missingtheseaside View Post
Now, what the credit card companies and banks don't warn you is this: if you go over 45%, it sends your score right down. So when, one month, our own usage went to 64% of our available credit, our score dropped down overnight to by 120 points, despite the fact that we paid the card off, in full and on time. This could not have come at a worse time, as we were looking to arrange a mortgage that month.
From my understanding, banks usually report outstanding balances, late payments, and payments made on a monthly cycle (at a specific date) for all revolving credit charges. If the reporting cycle is the end of the month and your statement has not been issued or paid, it can have a detrimental effect on you credit score. Moving your billing date forward can reduce the possibility of that occurring but it is always best to pay off and not charge for a month prior to applying for a loan.

When you begin using your cards in the US, always make sure you pay down your credit card to under 25% prior to the monthly statement coming through. (Apparently, and this has not been verified to me, you need to show SOME usage of your card for the score to be impacted positively.)
Banks normally do not report history for that month to credit bureaus if no transactions are made and there is no outstanding balance.
Michael is offline  
Old Apr 28th 2013, 5:27 pm
  #3  
BE Forum Addict
 
Joined: Feb 2010
Location: Temecula, CA
Posts: 4,759
GeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond reputeGeoffM has a reputation beyond repute
Default Re: Credit score - how to get one when moving UK to USA

Wiki Category:USA_Credit
GeoffM is offline  
Old Apr 29th 2013, 9:33 am
  #4  
Just Joined
 
Joined: Apr 2013
Location: Atlanta
Posts: 1
BillyBoston is an unknown quantity at this point
Default Re: Credit score - how to get one when moving UK to USA

It provides a snapshot of risk that banks and other institutions use to help make lending decisions. Applicants with higher FICO scores might be offered better interest rates on mortgages or automobile loans as well as higher credit limit amounts.
BillyBoston is offline  
Old Apr 30th 2013, 6:18 pm
  #5  
Bob
BE Site Lead
 
Bob's Avatar
 
Joined: Aug 2004
Location: MA, USA
Posts: 91,775
Bob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond repute
Default Re: Credit score - how to get one when moving UK to USA

Originally Posted by GeoffM View Post
Yeah, was thinking this has all been covered in the wiki and hundreds of previous threads before.

Anyway, score alone is pretty worthless and means nothing. The AmEx trick helps because it adds a level of history.
Bob is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.