Keeping a good credit score as an expatPosted on August 19, 2013
Keep things simple stupid or KISS is usually a good way to approach the world. Not when it comes to credit scores though. I recently had a friend return home to the US had a serious problem with banking and his credit score.
Although he was a successful entrepreneur who sold his business and had property in both China and Hong Kong he couldn’t get a loan in the US. Why? The US had no record of him for the last 18 years.
It did prevent my friend from buying a house back home in the US, despite having a cash deposit of $100,000 USD. So he
re is what my friend should (and would have) done with his time again.
How do I manage my credit score when I become an Expatriate?
Here are a few do’s and don’ts.
- Firstly understand the credit score from back home. Most are similar whether the US, UK, Europe or Australia. This article gives a broad overview of several systems.
- Do keep at least some credit cards and bank accounts open from home.
- Close any extra accounts slowly, not as a clump at once since this might seem suspicious to credit agencies.
- You can even let the credit agencies know you are overseas. This can help prevent or reduce the risk of identity theft. Did you know that people can apply for credit scores by say pretending to work at a bank? Identity thieves can use this information to identify people with sleeping credit cards and target people that
- Don’t change you address to your overseas location. That sounds counter-intuitive but some banks close accounts if you move overseas. It can also affect your credit score. So get a mail forwarding service or get a trusted relative or friend to send you scanned copies of your statements.
- Don’t stop using your accounts or credit cards. An account that is not used, at least once per month (say for dinner or flight booking, or health insurance payment) is not much better than no credit card at all. Agencies and banks give points to people who can manage their credit – not people who ignore it all together.
- Don’t – give up when you return home – you can influence your credit score. You might be able to get a credit score from the country where you have been living, and then inform credit agencies when you return home. This can help reduce the impact.
So how does China’s credit scoring system work? Well it doesn’t really have one, but it does have something similar according to this commenter.
Whether you are a long term or a short term expat, it doesn’t hurt to keep a good credit score back home (or even just having a credit score). My American friend had lived in Asia since graduation and his total lack of a bank account or score was a huge barrier. Even if you have no immediate or foreseeable plan to return home, it never hurts to be prepared.
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About Caterer Goodman Partners
Caterer Goodman Partners is a Shanghai based wealth management firm established with a clear vision to provide a new level of personalized financial planning services for expatriates in Asia. Our financial advisors provide guidance for our clients in all areas of investment, specialising in managed accounts, money-market funds, retirement planning and alternative investments. At Caterer Goodman Partners, we offer our advice and experience to provide low cost, tax-effective and simple solutions to match our clients’ interests.
About Owen Caterer
Since graduation Mr Owen Caterer has worked with the Queensland Premier's Department in Trade Facilitation and then as a financial adviser in Shanghai from 2005 until 2010. He then rose to Senior Adviser, then Business Development manager and then to Chief Investment Officer responsible for portfolios to a value of US$280 million across Asia. Following that Mr Caterer left to found his own firm with a partner in the financial advisory and wealth management area. This focused on developing China and Asia's first fee-based financial advisory (rather than commission-based). This has grown to now have 8 staff and and managing almost US$35 million for clients throughout Asia. This business success was recognized as a finalist in the 2013 ACBA in the Start Up Enterprises category and are one of a small number of foreign managed firms to have a full asset management license in China. Owen has also been active in the community volunteering for the Australian Chamber of Commerce in Shanghai and acting as the Vice-Chair of the Small Business Working Group (2012-2014) and as the Co-Deputy Chair of the Financial Services since 2013 until the present. They have continued to grow their business and have now been selected as a small group of companies who are platinum members of the Australian chamber of commerce. The achievement they are most proud of is their efforts to reform the financial planning industry in China and push it away from a hard-sales commission driven model to a more ethical management fee and long term customer service model. Owen has a Graduate Diploma of Applied Finance from the Securities Institute of Australia of which he was a member as a Fellow of Finance for many years and also has an undergraduate degree from Griffith University in International Business. Owen's interests are tennis, running and his wife and two children. He speaks fluent Chinese, first arriving in China in 1997.
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