One of the most unexpected challenges Nigerians face when relocating abroad is building a credit history. In Nigeria, credit scores aren't commonly used in everyday financial decisions. Abroad, however, your credit score affects almost everything: renting an apartment, getting a phone contract, buying a car, obtaining a mortgage, and sometimes even employment. This guide explains how credit works in major destination countries and provides strategies to build yours from scratch.
Understanding credit is crucial for your long-term financial success abroad. Many Nigerians arrive with substantial savings only to discover they can't access financial products that locals take for granted. The good news is that with the right approach, you can build a strong credit score within 12-24 months of arrival.
What is a Credit Score?
A credit score is a numerical representation of your creditworthiness—essentially, how reliably you repay borrowed money. Credit bureaus collect information about your borrowing and payment behavior and use algorithms to calculate a score. Lenders use this score to decide whether to approve your applications and what interest rates to offer.
The fundamental problem for newcomers is that credit scores require history, and history requires time. When you arrive in a new country, you have no credit history there—not a bad history, but a complete absence of data. This "credit invisibility" can be as problematic as poor credit.
Country-Specific Credit Systems
United Kingdom
The UK has three main credit reference agencies:
- Experian: Scores range from 0-999
- Equifax: Scores range from 0-1000
- TransUnion (formerly Callcredit): Scores range from 0-710
Each agency may have slightly different information about you, so lenders may see different scores depending on which agency they check.
What affects your UK credit score:
- Electoral roll registration (very important!)
- Payment history on credit accounts
- Length of credit history
- Credit utilization (how much of your available credit you use)
- Number of credit applications
- Residential stability
- Financial associations (links to others' credit profiles)
United States
The US has three main credit bureaus:
- Experian
- Equifax
- TransUnion
FICO scores (the most commonly used) range from 300-850. VantageScore is an alternative scoring model with the same range.
Score ranges:
- Excellent: 750+
- Good: 700-749
- Fair: 650-699
- Poor: Below 650
The US credit system is particularly important because credit affects many aspects of life, including apartment rentals, utility deposits, and insurance rates.
Canada
Canada has two main credit bureaus:
- Equifax Canada
- TransUnion Canada
Scores range from 300-900. The factors affecting your score are similar to the US: payment history, credit utilization, credit history length, credit mix, and new credit applications.
Strategies to Build Credit
Universal Strategies
1. Get on Official Records
Register for everything that establishes your identity and residence:
- Electoral roll (UK) - this is huge for UK credit
- Utility bills in your name
- Stable address
- Bank account
2. Open a Bank Account Immediately
Your bank account is the foundation of your financial identity. Open one as soon as possible after arrival. Some banks offer accounts specifically designed for newcomers:
- UK: HSBC, Barclays, Monzo
- US: Chase, Bank of America
- Canada: Scotiabank NewComer Program, RBC Newcomer Advantage
3. Start with a Secured Credit Card
A secured credit card requires a cash deposit as collateral. The deposit amount typically becomes your credit limit. Using this card responsibly is one of the most effective ways to build credit:
- Make small purchases each month
- Pay the full balance before the due date
- Keep utilization below 30% of the limit
- Never miss a payment
4. Become an Authorized User
If you have a trusted friend or family member with good credit, ask to be added as an authorized user on their credit card. Their positive payment history can help your score. This works best in the US and Canada.
5. Use Credit-Builder Loans
Some banks and credit unions offer credit-builder loans designed for people with no credit history. The money you "borrow" is held in a locked account while you make payments. Once paid off, you receive the funds and have established a positive payment history.
UK-Specific Strategies
Register on the Electoral Roll
This is one of the most important factors for UK credit scores. Even as a non-citizen, if you're from a Commonwealth country (like Nigeria!), you can register to vote in local elections. This dramatically improves your credit file.
Get a Mobile Phone Contract
A SIM-only contract or mobile phone contract that reports to credit agencies helps build your history. Pay by direct debit to ensure you never miss a payment.
Use Credit-Building Products
- Loqbox: A credit-builder savings product
- CreditLadder: Reports your rent payments to credit agencies
- Experian Boost: Adds regular bill payments to your credit file
US-Specific Strategies
ITIN for Credit Building
If you don't have a Social Security Number yet, an Individual Taxpayer Identification Number (ITIN) can sometimes be used to build credit.
Secured Credit Cards
US options include:
- Discover it® Secured
- Capital One Secured Mastercard
- OpenSky® Secured Visa
Newcomer-Friendly Banks
Some banks have programs for newcomers:
- Nova Credit: Partners with US banks to help newcomers use their international credit history
- Deserve cards: Don't require SSN
Canada-Specific Strategies
Newcomer Banking Programs
Canadian banks actively court newcomers:
- RBC Newcomer Advantage: Free credit card for newcomers
- Scotiabank StartRight: Designed for new immigrants
- TD New to Canada Banking Package
Secured Credit Cards
- Capital One Guaranteed Secured Mastercard
- Home Trust Secured Visa
Step-by-Step Credit Building Plan
Month 1-3: Establish Foundation
- Open a bank account
- Get utilities in your name
- Register on electoral roll (UK)
- Apply for a secured credit card
- Set up direct debits for all bills
Month 4-6: Build Activity
- Use secured credit card for regular small purchases
- Pay balance in full every month
- Consider a credit-builder loan
- Check your credit report for errors
Month 7-12: Expand Credit Mix
- If approved, get a regular (unsecured) credit card
- Keep old accounts open
- Continue perfect payment history
- Monitor your score's progress
Month 13-24: Optimize
- Consider credit limit increases (but don't increase spending)
- Maintain low utilization
- Add variety to credit types
- Prepare for major applications (mortgage, car loan)
Common Mistakes to Avoid
Applying for Too Much Credit
Each credit application leaves a "hard inquiry" on your report. Too many inquiries signal desperation to lenders and lower your score. Space applications at least 3-6 months apart.
Missing Payments
Payment history is the most important factor in credit scores. Even one missed payment can significantly damage your score and stay on your report for years. Set up automatic payments for at least the minimum amount.
Maxing Out Credit Cards
Using all your available credit (high utilization) hurts your score. Keep utilization below 30%, and ideally under 10%, of your total credit limit.
Closing Old Accounts
Length of credit history matters. Closing old accounts shortens your history and reduces available credit (increasing utilization). Keep old accounts open, even if you rarely use them.
Not Checking Your Credit Report
Errors happen. Regularly check your credit report for inaccuracies, accounts you don't recognize, or identity theft. You're entitled to free annual credit reports in most countries.
Monitoring Your Credit
UK
- ClearScore: Free Equifax score and report
- Credit Karma: Free TransUnion score
- Experian: Free Experian score
US
- AnnualCreditReport.com: Free annual reports from all three bureaus
- Credit Karma: Free TransUnion and Equifax scores
- Experian: Free Experian score
Canada
- Credit Karma Canada: Free TransUnion score
- Borrowell: Free Equifax score
How Long Does It Take?
Building credit from scratch typically takes:
- 3-6 months: To have a credit score at all
- 12-18 months: To have a decent score (650-700+)
- 24-36 months: To have a strong score (750+)
Patience is essential. There are no shortcuts that don't involve risk. Avoid any service that promises to instantly fix your credit—these are often scams.
Why Credit Matters
Your credit score affects:
- Mortgage approval: Your ability to buy a house
- Interest rates: Good credit means lower rates, saving thousands
- Renting: Landlords check credit for rental applications
- Car loans: Financing vehicles becomes possible
- Phone contracts: Better deals with good credit
- Insurance rates: Some insurers use credit for pricing
- Employment: Some employers check credit for certain roles
Investing time in building good credit pays dividends throughout your life abroad.
Conclusion
Building credit in a new country requires patience, discipline, and the right strategies. Start immediately upon arrival by opening bank accounts, registering on official records, and obtaining a secured credit card. Make all payments on time, keep credit utilization low, and monitor your progress regularly.
While it can be frustrating to start from zero despite having excellent finances, view it as an investment in your future. Within a few years of consistent effort, you'll have the credit profile needed to achieve major financial goals like home ownership.
Your financial habits in the first year set the foundation for decades of opportunities. Start building your credit today!