Maintaining a US Credit Report While Living Abroad

Your credit profile and ability to obtain future financing is the last thing on your mind if you’re planning on living abroad for a few years. Many Americans simply pack their bags and go off on their adventure without much thought to how this may impact their credit profile. However, once its time to move back home and you want to purchase a house your spotty credit profile can be a big obstacle. This is especially true if you end up living abroad for more than three years.

I have family in this exact same situation so I’ve given this matter some thought. A borrower whom I recently worked with has provided me with an exact idea of how to balance your desire to live abroad and still maintain a foothold in the US credit markets.

The first thing you should do is open a Post Office Box in your home town. Then change all your credit card mailing addresses to this PO Box. This is fairly inexpensive. I’ve obtained PO Box quotes for as low as $10/month. Then, arrange with the PO Box provider to forward all your mail to your address abroad on a regular basis.

There is a problem with this strategy if you’re a paper bill kind of person. However, to pull this off you need to begin making all your credit care payments online – before receiving your bill. This is because you could receive a bill (after forwarding) a few months later.

I suggest you keep four US based credit cards open during your time abroad.
Use these cards once a quarter or every six months for a minor purchase (such as gasoline – although in Europe this may not be a minor purchase, considering gas prices). Then clear the bill in the following billing cycle. This maintains activity on your account and demonstrates that you’re making timely payments.

This level of diligence will pay off when it comes time to move back home to the United States. Any mortgage lender will be able to run your credit score with your PO Box address. You may need to provide an explanation of your residence history for the past two years, but that is pretty easy to do.

It’s exciting to have the opportunity to live in a different country for a few years. Many Americans chose to move back after a few years. And when that time comes its better to be prepared than not, believe me my in-laws wish they had done it!

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