How does Credit work outside the USA?

[Tattoo]

For all those that live outside the USA.

Can you please explain to me how YOUR "Credit System" works?

I was told that there is NO such thing a "Credit Reporting Bureaus"?!
I was also told that Interest Rates on loans (Cars, Credit Cards, Mortgages, etc) are NOT based the same way as in the USA?!

Please enlighten me...

Lets say I live in London - Whats the process like to buy a car?

If I live in Sweden, How is the credit process to buy a home?

Thanks for your time.

 

[Izzy]

In Canada we have Equifax and TransUnion which are the two main credit bureaus. The information on these bureaus and some bank supplied information are used to calculate a Beacon score. This score has a definite impact on the interest rate given to the customer whether it be for a car loan or a mortgage. It's a way of basing loan pricing on the risk profile of the customer.

This process will vary a bit in each bank or credit union but this is generally how it works. I think the Canadian system is very similar to the system in the U.S. except that our system has a lot more regulation.

 

[Tattoo]

In Canada we have Equifax and TransUnion which are the two main credit bureaus. The information on these bureaus and some bank supplied information are used to calculate a Beacon score. This score has a definite impact on the interest rate given to the customer whether it be for a car loan or a mortgage. It's a way of basing loan pricing on the risk profile of the customer.

This process will vary a bit in each bank or credit union but this is generally how it works. I think the Canadian system is very similar to the system in the U.S. except that our system has a lot more regulation.

Thanks!
Any one else not around the US have some info?

 

[cazlar]

I'm not the best person to ask, as I only have a nebulous idea of how it really works, but I know in Australia there is not a huge emphasis on "credit score" as there is in the US. I was shocked to find on moving to the US that even renting an apartment required the landlord to run a credit check? WTF? I understand they might want to check I'm actually employed and I am who I say I am, so that I can pay rent, but why do they need to know my credit status? Of course, being new to the country, I had no credit score, so in the end I had to pay an extra security deposit to get the place! I also can't actually get a decent credit card here and had to finally go for a low-value secured one (and a debit card).

As far as I know, there is some bank/company in Australia that keeps track of your credit in the background, but you never actually have any contact with them or have a "score" that is exposed to anyone other than lenders. Its my understanding that if you go apply for a home loan, you get the advertised rate, as long as you have enough deposit, savings history and income to satisfy the lender. I assume at this stage they consult your credit records too, but not so much to determine a rate, rather to determine if you are reliable. Depending on the situation, you might be able to negotiate a slightly better rate, but usually that is for bigger loans.

As far as credit cards go, as soon as I got my first real full-time job in Oz, I applied for a card and got one straight away with a $15,000 limit (way too high IMHO!). With no other credit history (as far as I know).

 

[oblomow]

In the netherlands there's a central organization registrating all credit requests (loans, credit cards, mortgages). Bank will check these records if you apply for a loan. Renting a house/apartment does not get you checked however.
You (of course!) have the right to check what is registered about you. Costs a few euros.
Buying a car on credit? As far as I know, it's not that common in the NL. But if it's a loan, the probably check your credit at the 'Tiel', which is where the central registration takes place.

Mind you, from what I've heard from friends in the US, buying things on credit is more 'popular' in the US than the NL.

 

[iBlue]

I don't honestly know that much about it yet but when I moved from the US to the UK I believe my credit basically took a reset. I have no idea if this is true or not but the all important US social security number means next to nothing here so it made some sense.
The banking systems are pretty archaic in the UK but they have their complicated system for figuring out who you are and attaching a credit rating to you. (I am just not sure how exactly it works).
I think the way which you buy a car or a home is basically the same, they just have to go through their own process of approval a bit differently to determine who you are and what sort of credit you have here. They would likely ask for a couple forms of ID and proof of address/utility bills, pay slips and banking info.

</to the best of my limited knowledge on the subject>

 

[garybUK]

To be able to get credit in the uk you need to be registered on the Electoral Register, yes that allows you to vote!!! it basically pin points you to a specific region in the UK and lets them tax you!

We have 2 Credit scoring houses, Equifax and Experian.

Anything on credit is put against you on your credit reports.

A lot of it is address based, if you live with someone who has bad credit then the chances of you getting credit diminishes.

 

[nick9191]

A lot of it is address based, if you live with someone who has bad credit then the chances of you getting credit diminishes.

Thats true, if your wife/husband has a bad credit rating it will mess yours, however if you divorce, you can write to have your credit rating changed so it will no longer be affected by theirs. Of course there are various (legal) ways around it.

Of course if the credit company's are not playing by the rules (which happens a lot), then you will need to work hard to sort it out.

 

[CMarie32]

To be able to get credit in the uk you need to be registered on the Electoral Register, yes that allows you to vote!!! it basically pin points you to a specific region in the UK and lets them tax you!

We have 2 Credit scoring houses, Equifax and Experian.

Anything on credit is put against you on your credit reports.

A lot of it is address based, if you live with someone who has bad credit then the chances of you getting credit diminishes.

Do you happen to know if a credit score from those companies in America will transfer to the UK? I have heard no, that since its overseas, it doesn't transfer, so you basically start over there. I don't know how true that is though..

Thanks!

 

[5300cs]

In Japan, it's extremely difficult for foreigners to get a Japanese credit card (most likely they're worried that people will rack up a massive bill and skip the country ... like they do with cell phones.) Overseas-issued credit cards can be used in most places, however.

When I pay for something with mine, at the register I'm asked if I want to pay for it all at once or split it. My choices are from 2x all the way up to 32x. For example if I bought something for $100 and split it in two, I'd pay $50 this month and the remaining $50 next month (I only pay interest if I split a payment over more than 3 months.)

I missed a payment a few years ago, but wasn't penalized. I was told by the company that there is no "Black List", either. My yearly service fee is cheap, something like $100, I think.

 

[robbieduncan]

Do you happen to know if a credit score from those companies in America will transfer to the UK? I have heard no, that since its overseas, it doesn't transfer, so you basically start over there. I don't know how true that is though..

Thanks!

Largely no, overseas credit scores mean nothing here in the UK. My girlfriend is Canadian and she can only get a credit card with a limit of £100 as she has no credit history in this country...

 

[war eagle]

So if I move out of the US and have a few unpaid credit cards when I get to another country it'll be like they didn't exist? That is crazy.

I wonder what happens when people are gone a while and decide to come home?

 

[trule]

So if I move out of the US and have a few unpaid credit cards when I get to another country it'll be like they didn't exist? That is crazy.

I wonder what happens when people are gone a while and decide to come home?

They arrest you at airport customs...

 

[war eagle]

They arrest you at airport customs...

That's what I thought lol.