Score Advice

6 Tips to Protect Your Credit Score While Living Abroad

Whether it's a great job opportunity or a desire to retire abroad, living the expat life has never been easier. Products like Skype and WhatsApp make staying connected "back home" a breeze. Logging onto your bank, credit card and other financial accounts —or using an app—eliminates plenty of hassles.

One important job for American expats is to maintain and continue to improve your U.S. credit scores while you are abroad.

Granted, your U.S. credit scores are not going to help you while you're abroad. Countries that use credit scoring typically have their own scoring systems and regulations, and your U.S. credit report files are not transferable. But if you have any inkling you will one day want to move back to the U.S., having solid credit scores will make for a smoother return. American expats that return with strong credit scores will likely have an easier time renting or buying a home, setting up utilities, and qualifying for a car loan.

With just a little planning, American expats can easily keep their credit scores humming while living abroad.

  1. Keep a U.S. address

    This is the key to being able to continue using your U.S. credit cards, and maintaining a bank account or other financial accounts. If you don't want to ask relatives if you can piggyback on their address, you can sign up for an account at a mail forwarding service that gives you an actual address for all correspondence (not a P.O. box.). Change your mailing address for your financial accounts to this new address.

  2. Turn off all snail mail statements

    If you haven't already, going expat should be all the motivation you need to stop receiving paper mail. With e-statements you can run your financial life from just about anywhere in the world. It's also a smart step to help protect yourself from identity theft.

  3. Keep your U.S. credit card accounts open and active

    With a U.S. address you can keep using your U.S. credit cards. Continuing to use your card and paying the bill on time monthly plays a big role in determining your credit score. (See also: How Credit Scores are Calculated.)

    If you intend to be stateside a few times a year, continuing to use your card when you're in the U. S—and making timely payments —will help keep your credit accounts active, which will help maintain your credit scores.

    If you don't expect to make frequent return trips to the U.S., you can always use your U.S. card globally. That only makes sense if your card does not charge a foreign transaction fee. And be sure to check if you need to let your card know that you will be making charges outside the U.S.

    The most elegant solution to keeping a credit card active is to use your U.S. card to continue auto-paying a recurring U.S. bill. For example, Netflix and Spotify are available in many countries; so you can keep those services and continue to pay with your U.S. card and you're good to go. Another option is to do some online shopping. Amazon maintains multiple international sites, and offers international shipping to many markets. You can use the same Amazon login and pay with your U.S. credit card. The one hitch is when using a foreign site and paying with a U.S. card, your purchase cost will be converted to U.S. dollars on the current exchange rate, meaning the cost of those items could go up if the dollar is weak vs the local currency.

  4. Maintain a U.S. bank account

    You also should maintain a checking account with a U.S. bank to streamline payment of your credit card bills. And if you've got other debt, like a mortgage if you're holding onto your home, or student loans, you will want to use auto-pay from your checking account to stay on top of these payments.

  5. Be extra alert

    Turn on every possible alert for your credit card and bank statements. Email alerts are likely the smart way to go. While maintaining a U.S. cell phone may be necessary so you can receive security verification codes when you want to wire money from your U.S. bank to your foreign bank account, you don't want to keep a U.S. cell phone on 24/7 given roaming charges. Receiving security alerts by email reduces the need to keep your U.S. cell phone on.

  6. Take extra care to protect yourself from identity theft

    A fraud alert or a credit freeze can be extra peace of mind from thousands of miles away. Or you may want to consider a credit monitoring product as an extra layer of protection while you're an expat.

Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
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