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Do UK student loans affect US credit score?

Do UK student loans affect US credit score?

Old Nov 13th 2017, 5:24 pm
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Default Do UK student loans affect US credit score?

Hi I'm new to this forum so hope this is in the right place.

I will be moving to the USA from the UK in 2 years once my green card application has been approved. I finished university last year and have a student loan debt of £60000+. I'm wondering if the UK student debt will affect my US credit score?

I can't find any information anywhere and I want to start paying more, if it affects my credit rating.
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Old Nov 13th 2017, 5:34 pm
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Default Re: Do UK student loans affect US credit score?

Originally Posted by kirstiep View Post
Hi I'm new to this forum so hope this is in the right place.

I will be moving to the USA from the UK in 2 years once my green card application has been approved. I finished university last year and have a student loan debt of £60000+. I'm wondering if the UK student debt will affect my US credit score?

I can't find any information anywhere and I want to start paying more, if it affects my credit rating.
No, there is no connection.
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Old Nov 13th 2017, 7:30 pm
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Default Re: Do UK student loans affect US credit score?

Hi and welcome to the forum.

Couple things:

You don't have a green card application. Instead it sounds like an immigrant visa petition/application? Are you married to a US citizen? Or have some other close family connection?

Regarding your student loan - you still have an obligation to pay even if you're working abroad! Don't free load and get your repayments going.

It won't help your US credit score positively, but if your debt is sold to a US collections company you can sure as hell expect they will be knocking over a debt that large. And that will definitely negatively affect it!
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Old Nov 13th 2017, 7:30 pm
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Default Re: Do UK student loans affect US credit score?

Originally Posted by kirstiep View Post
Hi I'm new to this forum so hope this is in the right place.

I will be moving to the USA from the UK in 2 years once my green card application has been approved. I finished university last year and have a student loan debt of £60000+. I'm wondering if the UK student debt will affect my US credit score?

I can't find any information anywhere and I want to start paying more, if it affects my credit rating.
It won't affect your credit score.

but bear in mind that when the Student Loans Company work out your student loan payments they just do a straight currency conversion from your US salary to Sterling.

So your student loan repayments can often feel quite high compared to what you'd pay in the UK.
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Old Nov 13th 2017, 7:56 pm
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Default Re: Do UK student loans affect US credit score?

Thank you for all of your replies!

My mum currently lives in the US and has a green card and I think I have a I-130 form filled? This is all new to me so I'm not completely sure on all of the correct wording.

To be clear I am not trying to get out of repaying my student loan at all! I just want to make sure that it will not affect my credit score once I get into the US.

As the debt is just a high figure it would take many years before I would be able to pay it off and the advice in the UK is to pay as minimum as possible as the debt will get wiped off in 30 years.
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Old Nov 13th 2017, 8:02 pm
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Default Re: Do UK student loans affect US credit score?

Hi, kirstiep!

I'm in a similar boat. I'm moving to the U.S. this month - I graduated this past July from a UK university, with all the bog-standard student debt. When you move overseas, there is a form you need to fill in and send to Student Finance England - you can read about this here:

Plan 1: Student Loan Repayment - Plan 1 - Repaying from overseas

Or:

Plan 2: Student Loan Repayment - Plan 2 - Repaying from overseas

As per usual, they will work out your repayments based on your plan (the threshold varies between Plan 1 and Plan 2, as you likely know). I've also read something (though can't think of the source right now, sorry) that echos what GeneralPowerpoint points out above - the amounts we'll repay from the United States will likely be higher than the amounts we'd repay if we remained in the UK. I don't recall the reason for this being due to currency conversion (I thought it had something to do with varying thresholds dependant upon the country of residence?), but I may be wrong. Either way, the important thing is to keep Student Finance in the loop.

There seems to be a huge misconception about Student Loans being written off if you move abroad - one of the questions I get asked most frequently by people newly learning of my circumstances, is if I ever have to repay my student debt. Absolutely, I do! For several thousand reasons. But primarily because the last thing I'd want is to have Student Finance breathing down my neck a few years from now, and then sending bailiffs to break into my house and steal all the fancy stuff I don't have.

Last edited by KK85; Nov 13th 2017 at 8:25 pm.
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Old Nov 13th 2017, 8:05 pm
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Default Re: Do UK student loans affect US credit score?

Are you under 21? If not the wait for F2B applicants is nearer 7 years.
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Old Nov 13th 2017, 8:15 pm
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Default Re: Do UK student loans affect US credit score?

Originally Posted by KK85 View Post
I've also read somewhere (though can't think of the source right now, sorry) that echos what GeneralPowerpoint points out above - the amounts we'll repay from the United States will likely be higher than the amounts we'd repay if we remained in the UK. I don't recall the reason for this being due to currency conversion
It's not that the amounts are actually higher. It's that they feel higher because they don't take into account purchasing power when they do the conversion.

So you might earn more in Sterling when you work in the USA. But it doesn't actually buy more because the cost of living can be higher too.

So you end up paying a higher percentage of your disposable income on student loan payments because they over estimate how much you're earning in real terms.

If that makes sense?
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Old Nov 13th 2017, 8:18 pm
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Default Re: Do UK student loans affect US credit score?

Originally Posted by GeneralPowerpoint View Post
... you end up paying a higher percentage of your disposable income on student loan payments because they over estimate how much you're earning in real terms.

If that makes sense?
It does. Thank you for the clarification!
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Old Nov 13th 2017, 9:04 pm
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Default Re: Do UK student loans affect US credit score?

So in the UK we're encouraged to pay off as little as possible over time as the remainder will be written off in 30 years. Is this still a good policy or would it be better to pay it off ASAP?

I know that there's a trans-Atlantic financial agreement that I've had to sign with my bank to release financial info to the IRS if they ask (Obama introduced it so that assets weren't hidden abroad), but would that mean that my UK student debt appears on my US credit report? It doesn't right now (I have US bank accounts and credit cards), but could it in the future?
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Old Nov 13th 2017, 9:29 pm
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Default Re: Do UK student loans affect US credit score?

I can't speak to the Student Loan, but your credit score will be a nice fat zero once you get here.
There's no way to carry it over. The closest I got was opening an account with HSBC who offered me a credit line that corresponded to my (thankfully healthy) salary in the US. I had to even pay a $250 deposit just to get an internet line connected up, because according to the credit bureaus I simply don't exist at the moment.
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Old Nov 14th 2017, 7:27 am
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Default Re: Do UK student loans affect US credit score?

Originally Posted by kirstiep View Post
So in the UK we're encouraged to pay off as little as possible over time as the remainder will be written off in 30 years. Is this still a good policy or would it be better to pay it off ASAP?
Who encourages that?! I'd say that's an irresponsible, entitled and unfair policy (I'm not saying you are those things things, but whomever endorses such actions) and the right thing to do is pay our debt as and when we meet the threshold. Don't do as some folk do and stay in low-paying work just to avoid paying back education loans - you'd be punishing yourself just to spite a system that has afforded you a (granted, expensive) luxury. Us Brits are spoiled enough when it comes to the ease of obtaining education. Why do some people go to uni, if only to then deliberately keep themselves in low-paid work thereafter? This has always baffled me.

Originally Posted by kirstiep View Post
I know that there's a trans-Atlantic financial agreement that I've had to sign with my bank to release financial info to the IRS if they ask (Obama introduced it so that assets weren't hidden abroad), but would that mean that my UK student debt appears on my US credit report? It doesn't right now (I have US bank accounts and credit cards), but could it in the future?
I'm afraid I don't know anything about this. As far as I understand, student debt does not affect UK credit scores, and as the debt (for all the time you're paying it) will still be handled by a UK company, presumably that would mean it wouldn't touch US credit scoring systems? But I'm not sure. Three people above, though, have already advised that it will not, and what Tom said makes sense - if it's passed on to a debt collection agency, that's when one would need to be worried.

Last edited by KK85; Nov 14th 2017 at 7:44 am.
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Old Nov 14th 2017, 8:02 am
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Default Re: Do UK student loans affect US credit score?

Originally Posted by SanDiegogirl View Post
Are you under 21? If not the wait for F2B applicants is nearer 7 years.
Out of interest, if the OP is 20 for example (I'm guessing not if she finished uni last year, but you never know!) and doesn't have her IV by the time she turns 21, does she automatically get put in to the category with the longer processing time?

Pretty sure the OP will come under that category unless she was a child genius, but I just wondered how it worked.
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Old Nov 14th 2017, 12:42 pm
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Default Re: Do UK student loans affect US credit score?

Originally Posted by MorsePacific View Post
I can't speak to the Student Loan, but your credit score will be a nice fat zero once you get here.
There's no way to carry it over. The closest I got was opening an account with HSBC who offered me a credit line that corresponded to my (thankfully healthy) salary in the US. I had to even pay a $250 deposit just to get an internet line connected up, because according to the credit bureaus I simply don't exist at the moment.
This might not be true for the OP. I originally thought the same. The OP has gone on to say that he/she currently holds US credit cards and a US bank account. At some point, he/she must have lived in the US legally and was able to obtain both.

"I know that there's a trans-Atlantic financial agreement that I've had to sign with my bank to release financial info to the IRS if they ask (Obama introduced it so that assets weren't hidden abroad), but would that mean that my UK student debt appears on my US credit report? It doesn't right now (I have US bank accounts and credit cards), but could it in the future? "

Last edited by Rete; Nov 14th 2017 at 12:46 pm.
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Old Nov 15th 2017, 1:13 am
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Default Re: Do UK student loans affect US credit score?

No connection but here's a trick I've been using to build credit in America.

I pay some of my student loan on an American credit card. Not only does it build my credit which was non existent in the US; I get grocery and fuel points.
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