Moving abroad is thrilling, you get to explore new cultures, meet new people, and start fresh. But there’s one hidden challenge many newcomers face: building credit in a new country.  Lenders use your credit score to decide if they’ll trust you with loans, credit cards, or even rental agreements.

A strong score opens doors and saves you money on interest, while a low score can make life more expensive and complicated. Starting from scratch can feel tricky, but it’s completely doable. With the right steps, you can build a solid credit history, gain financial freedom, and confidently take on life abroad.

Read also: Building credit while living abroad: What nomads need to know

Key reasons to start building credit in a new country

Building credit abroad is the key to unlocking smoother living. From renting homes to securing loans, a good credit score makes everyday life easier and more affordable.

1. Easier housing approval‍

A good credit score makes renting faster and less stressful. Newcomers in Toronto or Berlin often avoid large deposits and secure apartments more easily once they establish credit.

2. Better contract terms

With solid credit, service providers trust you more. This means lower deposits on phone or internet plans and the flexibility to negotiate better terms on leases or utilities.

3. Higher credit limits

Good credit brings higher card or credit line limits. This gives you financial breathing room to handle emergencies, cover travel, or manage daily expenses more flexibly.

4. Better loan options

Thinking long-term? Solid credit opens the door to mortgages and car financing, giving expats abroad the chance to plan bigger investments with confidence.

5. Access to mortgages

Solid credit opens the door to mortgages and car financing, giving expats abroad the chance to plan bigger investments with confidence

6. Better insurance rates

Insurers use credit to assess risk. In the U.S., expats with strong credit often save hundreds yearly on car or health insurance, freeing funds for travel or savings.

Read also: What nobody tells you about your first year living abroad

Credit options expats can build overseas

• Credit cards: Start small with a secured card or beginner-friendly option.
• Personal loans: Small, manageable loans help demonstrate repayment reliability.
• Auto loans: Financing a car abroad can boost your credit when paid on time.
• Student loans: Paying off tuition builds history while investing in yourself.
• Retail accounts: Even small accounts show lenders you can handle credit responsibly

Steps to build credit in a foreign country

1. Open a bank account

The first step to building credit abroad is opening a local bank account. It shows lenders you’re financially responsible and creates a base for other credit products. Even simple checking or savings accounts demonstrate stability. For example, expats in the UK often open a bank account to set up direct debits for rent or utilities, which instantly helps them establish a financial footprint.

Read also: How to protect your funds while travelling abroad

2. Apply for a credit card

If you’re starting from scratch, a secured credit card is a great way to begin. You deposit money as collateral, and your spending and repayments are reported to credit bureaus. Over time, this builds your credit history safely. For instance, many newcomers in Canada and the U.S. start with secured cards to pay for groceries or transport, gradually earning lenders’ trust.

3. Keep your credit utilisation low

Credit utilisation is how much of your available credit you actually use. Keeping it below 30% shows lenders you’re responsible and reduces risk. For example, if you have a £1,000 limit, try to use no more than £300 at a time. Expats in Spain often use their card just for essentials like groceries, then pay it off quickly to maintain a healthy balance.

4. Make timely payments

Paying bills, loans, and credit cards on time is crucial. Lenders reward consistency, and late payments can hurt your score. Even small payments, like utility bills or mobile plans, can count. Expats in Germany often set up automatic payments for phone or internet bills so they never miss a deadline and protect their growing credit score.

5. Monitor your credit score regularly

Keep an eye on your credit progress to catch errors or fraud early. Many countries offer free or affordable ways to check your score. In Australia, expats often use apps to track their credit monthly, helping them stay confident, correct mistakes quickly, and stay in control of their financial journey abroad.

Building credit in a new country may feel like starting over, but each step you take brings you closer to financial freedom and stability. From opening a bank account to making timely payments, these small actions open big doors, better housing, loans, and opportunities. With Grey, you can simplify your international financial life.

Sign up today or download the Grey app to manage money across borders with ease