Do you know my friend Isaac? Fair Isaac that is. When people talk about their “credit score” in the USA (and who doesn’t, it seems to me) they are normally talking abut their FICO score. FICO is the industry abbreviation for the Fair Isaac Company, the most powerful corporation in the USA, bar none, in my view.
Fair Isaac is the partner/contractor of all three major credit reporting companies and their job is to develop a numerical score which, is in Wikipedia’s words:
… A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. A credit score is primarily based on credit report information, typically sourced from credit bureaus / credit reference agencies. …
Several other developed countries such as Austria, Australia, Canada, Germany, Sweden, the UK and many others all have some sort of credit score system for their citizens or permanent residents who make financial transactions “in country”.
In the US, in particular, FICO seems a two-edged sword. there’s no doubt your FICO “number” is important, but there are also a lot of people who seem obsessed with it lately … it’s really hard to say who is totally right about the overall importance of a person’s FICO on a day-to-day basis.
Well, I have what is either good news or bad news … depends on how important your FICO (or home country equivalent score) is to you. If you decide to move to the Philippines you will never encounter Fair Isaac or any other their other country equivalents here.
Philippine banking privacy laws are among the most rigid on earth. They rival or even exceed the level of privacy of Swiss banks, Cayman island banks and others.
A bank who issues a credit card to you here in the Philippines basically can not report your credit history to anyone. Your credit here (or lack of same) is strictly between you and your bank. Want to do business with another bank? Fine, it’s always advisable in my view to have more than one, but you will start again from day one … like a high school kid getting his or her first car loan. There is no sharing or reciprocity of reporting between banks … indeed any “leakage” of customer’s data can prove to be a very nasty criminal prosecution issue, as well as a civil court matter that can drag on for decades.
The Philippine government has, for years now, had enabling legislation “on the table” that would allow credit reporting, but politically speaking it can only be done by a government agency, and no government agency has so far volunteered to do it, so the legislation is essentially dead.
So if you have a “prestigious” FICO score back in the USA, good for you … but don’t expect it to open doors or provide any discounts on loan rates and such here.
If you happen to have a low FICO score, that’s dandy too. It doesn’t matter if you earned the low score by recklessness, misfortune or even mistakes on the part of the credit agencies … it just doesn’t matter. No one in the Philippines really cares about your FICO score and it has nothing to do with daily life here. Just a little aspect of “culture shock” you may not have considered.
A tip from a layperson … always consult professionals in financial matters … if you do care about your FICO score and you think there is any possibility at all you may return to the US to live, I recommend you don’t do anything that would “burn your bridges”. Keep at least one US credit card “alive” with a US billing address and use the card 9responsibly. of course) on an occasional basis so that you still have a credit score if you ever return. You won’t lose or gain credit score points based on any Philippine financial transactions, they are not reportable anywhere (the US IRS may be an exception to the rule ;-))