Does a Good Credit Score Matter in Spain?

Does possessing a favorable credit score hold significance in Spain?

If you’re planning to relocate to Spain and start afresh, you might be curious about the fate of your credit score and its relevance in your new life. After years of diligently building up your credit score, paying off debts, and accruing savings, you may hope that your stellar credit history will seamlessly transition with you to Spain, facilitating the move.

However, the reality is a bit different. Credit scores typically do not transfer between countries. While this observation may primarily pertain to our American audience, where a credit score plays a pivotal role in financial affairs, it’s important to note that a good credit score abroad may not carry the same weight in Spain.

In Spain, establishing credit history anew is often necessary before accessing credit cards or mortgages. Despite your commendable credit standing from your home country, it’s likely that you’ll need to explore alternative methods to demonstrate your creditworthiness in Spain. Nonetheless, having a good credit score may still hold some value and could serve as supporting evidence, alongside other financial documentation, in securing a loan.

Global Credit Scores?

Despite the frustration of diligently nurturing a credit score over the years, the absence of a unified global credit rating system renders its significance moot when relocating to Spain. Unlike in your home country, there isn’t a universal credit score rating system applicable worldwide.

According to Capital One bank, there is currently no existence of global credit scores. While some credit bureaus operate across multiple countries, data privacy regulations often prohibit the seamless exchange of consumer credit information internationally. Consequently, individuals relocating may find themselves facing the challenge of being “credit invisible” in their new country, irrespective of their credit standing in their country of origin.

While certain countries like the United Kingdom, Germany, Canada, and Japan have their own credit scoring systems, the lack of international cooperation and divergent data privacy laws prevent any meaningful correlation between them.

Credit Scores in Spain?

In Spain, the concept of credit scores, akin to what our American readers are accustomed to, doesn’t quite apply. The Central de Información de Riesgo (CIR), or Risk Management Center, maintains records of credit activities without assigning credit scores.

As per the Banco de España website, the CIR manages a database encompassing loans, credits, guarantees, and other financial risks held by financial institutions. This database primarily reflects negative aspects such as defaulted accounts or delayed payments.

In contrast to the U.S., where positive credit behaviors contribute to a good credit score, in Spain, lenders predominantly scrutinize negative entries in the RIC record. Multiple negative entries could lead to rejection of credit or loan applications, or even exclusion from certain banks until outstanding debts are settled, or for a maximum period of six years.

Rather than solely relying on a numerical credit score, Spanish banks emphasize factors like demonstrable income, expenses relative to income, and any adverse credit history. Merely presenting a good American credit score won’t suffice in Spain.

However, a good credit score from the U.S. may complement other financial evidence when presenting a case to Spanish lenders. In such instances, providing comprehensive financial documentation enhances the likelihood of approval.