6 Tips to Protect Your Credit Score While Living Abroad

Quick Answer

When you live abroad, you could be more at risk of identity theft and other fraud that could damage your credit score. Protect yourself by maintaining a U.S. address, monitoring your accounts and more.

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Countries typically have their own credit scoring systems, so your U.S. credit scores won't help you while you're abroad—but protecting your credit is still important. If you plan to live in the U.S. again, having solid credit scores will make for a much smoother return. You'll have an easier time renting or buying a home, setting up utilities, qualifying for loans and credit lines, and possibly even landing a job.

When you're living abroad, you should keep your U.S.-based accounts active and monitor your credit to protect your credit score, among other precautionary moves.

1. Maintain a U.S. Address

The best way to maintain your credit while living abroad is to continue using your U.S. credit cards. However, to keep your existing cards, and to maintain your U.S. bank account or other financial accounts, you need a U.S. address. One option is to ask a relative or close friend if you can use their address for your financial accounts while you're overseas.

If you don't want to ask anyone, there are plenty of paid mail forwarding services for this purpose. These businesses cater to digital nomads and expats who need a U.S. mail address that's not a post office box. Some companies physically ship your mail to your foreign address, while others scan and send digital copies.

Once you've decided on what address you'll use, update all of your financial accounts to this new address.

2. Switch to Online Statements

It's ideal to receive as many of your bills digitally as possible while you're living abroad. This is partly due to the cost and hassle of receiving snail mail overseas, since some of the aforementioned forwarding services charge by quantity of mail.

But it's also a savvy way to help protect yourself from identity theft, since criminals can steal mail and use your personal information to commit fraud. When you switch all of your accounts to e-statements and online account alerts for payments, you reduce the risk of physical mail getting into the wrong hands, and you can run your financial life from just about anywhere in the world.

3. Keep Your Credit Cards Open

Regular, on-time payments for bills and debts comprise the largest portion of your U.S. credit score. Because of that, one of the best ways to maintain your credit while abroad is to keep your U.S. credit cards open and active, with regular use and on-time bill payments.

An easy way to do this is to set up autopay for recurring bills, like mobile phone service, since this ensures your card has regular activity and that your bill is never late. You can also use the card for subscriptions you'll continue using abroad, like Netflix or Spotify, to keep your card in use. Just avoid carrying a balance so you don't pay interest unnecessarily.

If you intend to visit the U.S. periodically, using the card when you're back home—and making timely payments—will also help keep your credit accounts active, and in turn help you maintain your credit scores.

You can also use your card for regular expenses while you're overseas if you have a widely accepted issuer like Visa or MasterCard. You might be able to use your U.S. credit card for grocery shopping or other purchases while abroad. Avoid doing this if your card has a foreign transaction fee, though many no longer do.

4. Maintain a U.S. Bank Account

The requirements for opening a local checking account in other countries can vary. One alternative is to use an international product like Wise. You get one debit card, but within that main account, you can open multiple checking accounts in different currencies and easily transfer money between them at favorable exchange rates.

Even if you do get a local checking account or use a similar product, it's optimal to keep your U.S. checking account open. This helps streamline the payment of your credit card bills, and if you have other debt, like a mortgage or student loans, you can use autopay from your checking account to stay on top of payments.

It also makes your life easier should you receive checks from U.S. residents, or if you work for U.S. companies that require paying to a U.S. bank account. Plus, if you visit home, or plan to return permanently, you'll already have your account.

Bear in mind that if you do plan to use your U.S. checking account to withdraw cash abroad, you shouldn't do it at just any ATM, or you may pay hefty out-of-network ATM fees (on top of currency conversion fees). Most major banks have partnerships with foreign banks that allow customers to use their ATMs without out-of-network fees.

5. Monitor Your Accounts for Signs of Fraud

When you're traveling globally, security standards are different and you might find your sensitive data at risk. For example, you may swipe your card at a small business where your card number isn't well-secured and gets stolen. Or if you use a public WiFi network without a virtual private network (VPN) and log in to online banking, a hacker could intercept and steal your login credentials.

It's key to stay on top of your finances proactively so you can act as soon as issues arise, before much damage is done. Turn on alerts for your credit card and bank statements; you may have the option to sign up for texts and/or email alerts. Regularly log in to accounts to review recent transactions to ensure there's no suspicious activity.

For added protection, sign up for free credit monitoring with Experian. You'll receive alerts if changes are detected to your credit report, which could help you head off unauthorized activity.

6. Secure Your Credit Report

If you won't be applying for any new forms of U.S. credit or need a credit check for any reason soon, consider giving yourself even more peace of mind with your credit. You have the right to add a credit freeze to your credit reports, and this can come in handy while you're on the other side of the world.

Also called a security freeze, a credit freeze is intended for victims of financial fraud, but it can add an extra layer of protection for anyone. When you place a freeze on your credit report, it limits access to your credit report and score. If a criminal gets your information and tries to open a credit card account in your name, the card issuer will see the freeze in place when they request your credit report. You can lift the freeze if you later need a credit check or approval, though you have to contact each credit bureau individually to both add and lift the freeze.

The Bottom Line

Even if you don't think you'll need your U.S. credit reports or scores for a while, it's still a good idea to take steps to protect them from fraud. Check your credit report and credit score for free with Experian at any time while you're abroad to ensure you're on the right track for your return.

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