One of the main issues affecting people who have recently moved to the UK is difficulties in getting credit cards, loans or even a mobile phone contract due to their lack of credit history. HSBC has become the first British financial institution to check international credit history when newcomers to the UK are applying for credit cards. This could be of particular benefit in the future to people who are applying for a credit report check as part of standard pre-employment checking.
How It Works
HSBC UK credit card applicants, whether new or existing customers, can now choose whether they want to use their international credit history when applying online. Currently, the HSBC service covers 12 countries, including Australia, Brazil, Canada, Spain, Switzerland, and the United States. HSBC has partnered with an international credit referencing agency and is hoping to extend the service to other countries in the future. Opting in for international checks requires your consent for the sharing of this information. Applicants will still be asked for supporting documents such as identification and income details. More information will be needed from anyone looking to access their international credit record, such as their home country ID number or passport number, overseas addresses, and details of when you moved to the UK.
Impact on Credit Score
The impact on your credit score of allowing a UK bank to access international credit history with HSBC on your credit will vary depending on which country you are dealing with. If you are accessing credit history from Australia, India, Spain, or Switzerland for example, this is classed as a soft search which does not affect your credit score. However, credit history from Nigeria or the United States is recorded as a hard search which could affect your credit score. As this system is still very new, it is likely that the system will be standardised over time as more companies start looking at international records.
Alternatives To International Credit History for UK New Arrivals
If you are new to the UK and need access to credit, another option is to look at credit cards marketed for individuals with bad credit. These cards are designed for people who find it difficult to get loans or other credit because of a poor credit score or lack of credit history. These cards typically offer lower limits, higher interest rates, and fewer benefits, but they can help you build your UK credit rating if used responsibly by ensuring that the bill is paid off in full every month. If you are eligible to vote, then getting onto the electoral roll at your British address can also help improve your credit score, as can being listed on utility bills for gas, electricity, or internet. Building credit does take time, and it can take a year or more for scores to improve. Anyone can sign up for one of the apps to manage credit score to track how things are improving over time.