Maintaining Your US Credit Score While Abroad

Your US credit score is probably not the first thing you think about as you prepare for a life abroad, but it’s something well worth remembering, especially if you're thinking of returning stateside someday. Maintaining a good credit score can make an eventual transition back to life in the US much easier, whether you’re looking to buy a house or just looking for lower insurance premiums, so it’s an important consideration when planning your overall financial future.

Should I cancel my credit cards before moving abroad?

Moving to another country doesn’t mean you need to cancel your US credit cards, it simply means you should be staying on top of them (i.e. checking your score once a year, reviewing the details, and acting on any unexpected information in the report, etc.). In fact, canceling a card may mean you inadvertently increase the proportion of available credit you are still using on other cards, unknowingly negatively impacting your credit score. Therefore, as is the case when in the US, it’s important you simply stay aware of how much credit you’re using on a monthly basis and ensure you pay it off regularly. If you intend to cancel one of your cards you ought to take into account how that will affect your overall credit picture. You may also shy away from canceling a card because the fees involved vary but can be high, so it’s important to check what you may be paying by doing so.

Why should I keep my US credit cards?

A great benefit of credit cards in the US is that they often have better overall rewards programs for using them compared to cards from other countries, meaning retaining an American card can mean better credit rewards (think cash back rewards, bonuses, etc.), so think twice before assuming that a credit card from your host country is automatically more beneficial.

Additionally, it’s a general truism that we just never know what the future holds for us. You may find that one day moving back to the US makes sense for your personal plan and/or life goals, and so having a credit score you’ve kept well-maintained and ready to go the second you land can be a huge help in arranging your affairs (new house, new car, etc.) from the moment you touch down stateside. Planning for these potential events now can save you a lot of hassle and stress in the long run, and all it takes is a swipe of the card (even for small purchases) every now and then, and vigilance with timely payments and credit score checks!

Our advisors would be glad to help you with any questions you have regarding your Credit Score.

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