We all understand the importance of good credit score, right? It can be the key to securing a rental apartment, getting a loan, or even landing certain jobs. But when you cross the Atlantic, does your UK credit score follow you?

The short answer is no. Your UK credit score doesn’t transfer to the U.S. However, understanding why and how you can build your credit in America is vital.

The History of Credit Scores

To understand why your UK credit score doesn’t transfer, it’s helpful to know a bit about the history of credit scoring. Credit scores as we know them today were developed in the U.S. in the 1950s by the Fair Isaac Corporation, now known as FICO. The FICO score became the standard metric used by lenders to assess a borrower’s creditworthiness.

In the UK, credit scores are managed by agencies like Experian, Equifax, and TransUnion—each of which uses a different scoring system and criteria.

While both the UK and U.S. use similar models to determine creditworthiness, these systems are not interconnected. Credit histories are stored in national databases, meaning your UK credit history is effectively invisible to American financial institutions.

What Factors Affect Credit Scores?

Understanding the factors that affect credit scores in both countries can help you build or rebuild your credit in the U.S. Here are the key factors:

• Payment History: Both in the UK and U.S., your history of paying bills on time is a significant factor. Late payments, defaults, or missed payments can severely impact your score.
• Credit Utilization: This refers to the amount of available credit you’re using. In both countries, it’s recommended to keep this below 30%. High credit utilisation can signal to lenders that you’re overextended financially.
• Length of Credit History: A longer credit history typically results in a better credit score. In the U.S., this can be a challenge for newcomers who are starting from scratch.
• Types of Credit: Having a mix of credit accounts, such as credit cards, mortgages, and loans, can positively impact your score in both countries.
• New Credit Inquiries: In the U.S., each time you apply for credit, an inquiry is made on your credit report. Multiple inquiries in a short period can lower your score slightly.

While these factors are similar in both the UK and the U.S., they are tracked separately by credit reporting agencies in each country. This separation is why your UK credit score doesn’t carry over when you move to the U.S.

Building Credit in the U.S.

Given that your UK credit score doesn’t transfer, how do you start building credit in the U.S.? Here are some strategies:

• Get a Secured Credit Card: Secured credit cards are an excellent way for newcomers to establish credit. These cards require a cash deposit, which acts as collateral and typically sets your credit limit. By using this card responsibly—making payments on time and keeping your balance low—you can begin to build a U.S. credit history.
• Apply for a Credit Builder Loan: Some financial institutions offer credit builder loans designed for people with no credit history. These loans are typically small, and the payments you make are reported to credit bureaus, helping to establish your credit.
• Become an Authorized User: If you have a family member or close friend in the U.S. with good credit, consider asking them to add you as an authorized user on one of their credit cards. This allows you to benefit from their good credit behavior, helping to build your credit profile.
• Open a Bank Account: While having a bank account doesn’t directly impact your credit score, it does provide a foundation for your financial life in the U.S. Having a checking and savings account can make it easier to manage your finances and eventually apply for credit products.
• Monitor Your Credit Report: Once you’ve begun building credit, it’s important to monitor your credit report regularly. In the U.S., you’re entitled to a free credit report once a year from each of the three major credit bureaus: Experian, Equifax, and TransUnion. Reviewing your report can help you catch any errors or fraud and track your progress.

The Challenges of Starting Over

Look, we get it, starting from scratch is really daunting. But building credit in the U.S. is totally achievable with some patience and discipline.

The biggest challenge for most UK expats is the time it takes to establish a robust credit history. Without one, you may face higher interest rates on loans, difficulty securing housing, and even challenges in getting certain jobs that require a credit check.

However, by taking proactive steps, you can gradually build a solid credit score that will serve you well in your new country. Remember, creditworthiness is something that’s built over time—so start as soon as possible.

Conclusion

While your UK credit score won’t transfer to the U.S., understanding the similarities and differences in how credit is managed can help you navigate the American financial system more effectively.

By using strategies like secured credit cards, credit builder loans, and becoming an authorised user, you can build a strong credit profile that will open doors to financial opportunities in the U.S.

Just remember that patience and consistency are key, as with so many things in life.