Going overseas? We tell you why this makes you vulnerable to being lumbered with bad credit, and tell you 5 things you should know to protect your credit rating when going overseas.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

You’re on that plane – drink in one hand, a copy of Lonely Planet in the other. It’s the trip of a lifetime, you’ve scrimped and saved for ages to get to this point – so excited to be heading off on your round-the-world-trip – with an extended stopover in the U.K. for some work. So long suckers!!!!

You’ll miss your family and friends, but it’s your right of passage to do what millions of young Australians do every day, jump on a plane and see the other side of the world.

But you are planning on coming back some time, right?

And watcha gonna do when you get back?

Get sensible again? Maybe save for a house?

Or save for another trip?

But thousands of young people find that one little thing can stop them taking out a mortgage, buying a car, or buying another plane ticket after they have been o/s – BAD CREDIT! And this is often why…

You come back home a little paler, a little chubbier, a bit wiser, but a hell of a lot poorer. You apply for a credit card – but you nearly fall off your chair – the application is declined. For some reason – you have a Telstra default on your credit rating.

“This has got to be a mistake!” You say, “I’m good for it – I always make my payments on time.”

But there it is – bad credit – and there’s nothing you can do about it.

After contacting Telstra, you find out it was the mobile phone account you had before you went overseas. There was this one last bill that you didn’t know about. And that bill was sent to your old address – again, and again, and then they put a default on your credit file when you didn’t pay it after 60 days.

You thought you had fixed everything up, but it seems you hadn’t.

Now the bill has tripled in size, and when you complain about the mistake on your credit file, Telstra tell you all they can do is mark it as paid if you pay it. It will be on your credit file for 5 years.

This is the scenario of many of our clients who contact us to help dispute their credit report. Time and time again we see people who have gone overseas or even just gone to the next suburb and think they have settled accounts prior to leaving, only to find those ‘final accounts’ haunting them in a big way for years to come.

Other people have gone overseas, taken their mobile with them, only to find they are hundreds of dollars in debt with no way to pay due to their phone bill.

Well, before you take off – here are 5 things you should know to protect your credit rating before going overseas:

1. Completely finalise your accounts

Contact every creditor to let them know you are going overseas, and provide them with new contact details for you if you are moving out of your home. If you are going for an extended period of time – rather than just paying your last bill, make sure you have finalised your account and requested a closing balance. Once you have paid the final amount, get it in writing to ensure it is the final bill for that account.

2. Cancel direct debits

If you have a direct debit set up, this can sometimes be with a separate company to the actual Creditor – particularly with things like gym memberships, so make sure you cancel any direct debits coming out of your account – finalise any outstanding amounts – and get the notification of the cancellation in writing.

3. Beware phone charges while overseas

Many phone companies charge you extra for calls you make and receive while you are o/s. Call your telco provider and make sure you know all the facts before you take your phone on a holiday with you. It might be better to get an overseas phone or SIM for your trip instead.

4. Beware splurging on credit cards

It can be hard to keep a tally on what you’re spending while you’re overseas. But do check your balance regularly to make sure you’re not blowing out your budget and sending yourself into debt when you get back. And while you’re there, you might want to check for this….

5. Beware identity theft

Just because you’re in holiday mode, doesn’t mean your privacy should be as well. Your personal information is a goldmine for fraudsters, and while you’re in transit, you can be vulnerable to identity theft. If identity theft leads to fraud, you can even have credit taken out in your name, and land in all sorts of trouble with your credit file with incorrect defaults and late payments against your name.

Keep belongings and personal information (especially Facebook logins) secure, and check all ATM’s and credit card machines for skimmers. Check your credit card online when you can regularly and watch you are logging in through a secure site. When you get home, grab a free copy of your credit file straight away. If there are any suspicious entries you may have been a victim of identity theft.

Checking your credit file

If you have come home from an overseas trip, and want to check what your credit file says about you, you should know you are entitled to a free copy of your credit report once a year from Australia’s credit reporting agencies.

It might be a good idea to order this copy of your credit report prior to applying for any new credit and it will be sent within 10 working days. It will tell you whether you have any bad credit, or whether there are any mistakes on your credit report.

If you think a default on your credit file is wrong, or you want to dispute your credit report, contact a professional credit repairer to discuss your suitability for credit repair. If the listing is incorrect, contains errors or just shouldn’t be there, a credit repairer can help prepare your case and give you the best chance of having the default or other mistake on your credit file completely removed so you can apply for credit with a clean slate.

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