British Credit Scores Vs Canadian Credit Scores
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When moving to a new country, it can take a little while to get acquainted with their financial systems. If you plan to become a permanent resident you may eventually want to apply for credit, such as a mortgage, so knowing how credit scores work from the start is a good plan.
In this post, I am going to take a look at some of the differences and similarities between credit scores in the U.K and in Canada.
While many countries have credit score systems that work in a similar way, there are sometimes differences too.
Knowing about the difference and what you can do to improve your credit score in any given country can really help you should you ever need to apply for credit, because of course, the better your score, the more you can borrow.
How Do Canadian Credit Scores Work?
A Canadian credit score is calculated using a points system that ranges between 300 and 900, with a higher score being a better rating.
Like with many other countries, Canadian credit scoring takes into account a range of factors including payment history (such as whether you have ever defaulted on payment) and any current outstanding debts.
In Canada, a credit score of over 720 is considered very good. Your credit score may be checked when you buy everyday things such as insurance and poor credit can lead to barriers such as not being able to purchase a monthly mobile phone plan.
How Do British Credit Scores Work?
When looking at a U.K Credit Score there are three main credit reference agencies that people use; TransUnion, Equifax and Experian.
Equifax recently overhauled its system to give a credit score out of 1000 rather than 700, with anything over 811 being considered excellent. Experian scores are out of 999 and TransUnion scores are out of 710 (with 628 being excellent).
In the U.K, banks and building societies have their own set of criteria for lending, so a credit score is more for reference than finding out whether a company will actually give you a loan, although they will look at data shared by a credit reference agency too.
Can I Take My Credit Score With Me To A New Country?
Unfortunately, you cannot take a credit score with you when you move countries. This is partly because each country will have different ways of analyzing data to do with credit scores and because data can’t be shared internationally between different credit bureaus.
How Can I Build A Credit Score In A New County?
Whether you’re moving from the U.K to Canada or vice versa, many of the ways to increase your credit score you’ve used in your home country will still apply.
If you plan to stay in a country for the long term and may eventually want to apply for a mortgage, applying for a credit card or store card and paying it off each month is a great place to start.
You may also want to consider your credit score back home (whichever side of the Atlantic that may be!) in case you ever decide to move back.
Keep up with any outstanding repayments on outstanding loans and try to use your credit card occasionally, perhaps to send something within your home country, such as a gift from Amazon that will be delivered to a family member.
In conclusion, whether you’re in the U.K or in Canada, your credit score is going to affect your finances, so understanding it and taking steps to ensure you build a credit rating from the moment you arrive in a new country, is always going to be a great financial choice.
