The United States is one of the most popular destinations for immigrants from the United Kingdom, and it’s not hard to see why. The culture may be different, but still similar in many ways. In early 19th century, the phrase “Special Relationship” was even coined to describe the political, diplomatic, economic and cultural ties between the two nations.
But while embarking on a journey across the pond is often exciting and offers various opportunities for a new life, you’ll need to be prepared to deal with the administrative matters that usually come with it. One hurdle that you may face in your early days is accessing credit in U.S. as a Brit.
In the past, different credit reporting systems, technical challenges and laws made it difficult to share credit information across international borders, even when the credit reporting agencies operate in both countries. Today, it’s possible to transfer your UK credit history to the U.S. and access products and services from credit cards to apartment rentals, student loans and more here in the United States. We explain more about how in this article.
Why is having a good U.S. credit score important?
Having a good credit history can play a critical role in helping you live a comfortable life as a newcomer in the U.S. Having access to credit in a new country isn’t just about getting a loan; it also has a direct impact on your ability to obtain financial products such as credit cards and bank accounts as well as access to essential services such as housing, transport and utilities.
Many newcomers today face challenges navigating the restrictions that lenders and creditors (including cell phone and internet providers) have in accepting a UK credit history. Because these credit institutions traditionally had no way to measure the financial stability of new clients from abroad, newcomers from countries like the UK often had to pay large sums for security deposits and interest rates and faced a restricted set of product choices.
After spending so much time and effort building your credit history in the U.S., it only makes sense to want to be able to use it in the U.S. Before we get into that, it’s imperative to understand the differences in how credit reporting works in both countries so you have an idea on what to expect when you arrive in the States.
Credit reporting: U.S. vs U.K.
While credit scoring and reporting systems in both countries are similar in many ways, there are some notable differences. For instance, major credit bureaus in the U.K. and the U.S. are the same — Equifax, Experian and TransUnion. And yet, your U.K. credit history does not translate to the U.S.
Other differences include:
1. Identification by lenders and credit bureaus
In the U.K., people are identified by lenders and credit bureaus through the information from their electoral register, which contains personal information including name, address, date of birth and an electoral number.
In contrast, people in the U.S. don't receive any direct financial benefit from registering to vote. Instead, they are identified by lenders and credit bureaus through their Social Security Number (SSN), a nine-digit number issued to U.S. citizens and residents.
2. How lenders use your credit score
In the U.K., each lender has their own separate scoring model depending on their criteria and what they’re looking for in a customer, according to Experian U.K. They can still use the scores provided by the credit bureaus but mostly for educating the consumer about their credit rather than use it to evaluate creditworthiness.
This is different in the U.S. where lenders can pull your credit score from the credit bureaus and use it to evaluate your application for credit. Most U.S. lenders and creditors use some version of either the FICO score or VantageScore models. While your credit score is not the only consideration for assessing your creditworthiness, it has a major impact on the success of your application.
Building U.S. credit with your U.K. credit history
Building a good U.S. credit score takes time, but with diligent effort, it is achievable. If you’ve recently moved to the U.S. and are in need of certain financial products right away, the long wait isn’t ideal.
In these instances, you may be able to transfer your U.K. credit history through Nova Credit. The company works with top global consumer credit bureaus around the world, helping U.S. immigrants transfer their international credit through the global Credit Passport® so that lenders and creditors can use it to evaluate their application.
This means that the good credit history you’ve worked so hard to build up in the U.K. can now be used to improve your chances of applying for credit in the U.S.
Use your U.K. credit history to apply for U.S. credit cards and more
In partnership with Equifax UK, Nova Credit can translate your U.S. credit file into a U.S.-equivalent score to be used by lenders and creditors for:
- Credit cards - Through Nova Credit’s recent partnership with American Express, you can now apply for an American Express credit card using your U.K. credit history. You can also apply for a credit card from other providers, including Petal®, Deserve, OpenSky®, Green Dot primor® and Applied Bank®. Check out our guide on how to apply for an American Express Card with your international history to get started.
- Apartment rentals - Nova Credit works with tenant screening platforms like Yardi, Intellirent and First Advantage to help you use your U.K. credit history to rent an apartment in the U.S.
- Phone plans - Use your Credit Passport to apply for a postpaid phone plan in the U.S. Learn more my emailing firstname.lastname@example.org
- Student loans - Apply for a student loan to study in the U.S. with an MPOWER Financing loan through Nova Credit
Using your U.K. credit history to access products and services in the U.S. can help you arrive and thrive. Nova Credit can help you obtain an initial line of credit and enjoy the many products available to you as you start building your U.S. credit profile and credit score.
In addition to the U.K., Nova Credit currently connects to international credit bureaus in Australia, Brazil, Canada, India, Mexico, Nigeria and plans to offer its global Credit Passport and other services to many more countries in the near future. If your country isn’t available yet, register for our newsletter for updates.