Yes it can, but it doesn’t need to.
If you go abroad for a period, when you return there can be a sort of black hole in your credit history as you have not been here, and this can potentially lower your credit score and make it harder for you to obtain finance when you return. But it doesn’t need to be this way.
What happens is that because you leave the country a few simultaneous things can affect you. Firstly, and probably most importantly, often people come off the voters roll because the place you call home (aside from barracks), when the electoral register form comes round, the remaining residents at the property cross you off as no longer there because you are away.
Secondly, some of the things you would normally have in the UK such as gas accounts, mobile accounts, and other credit agreements that are on your file, come to an end as they are redundant since you left and show as inactive, or settled, on your credit file.
Therefore, when you come back and start to apply for credit again it looks like you have simply disappeared for the time you have been away. This is bad because UK credit scoring systems are not really set up to deal with military situations, and the systems can sometimes assume one of a few things but most notably;
- You have not supplied correct information on your application and not declared where you have really been, which causes concern for anyone looking at your application
- You have been here, but have limited or no use of credit for the period, so you are an unknown quantity as you have little or no history of paying your credit bills anymore
Both of these situations cause concern for a lender as you will not fit the standard civilian scoring model, and, as a result, may find that you are either declined for finance, or offered a higher rate than you really deserve as you present yourself with a higher risk score than really you actually are.
But it doesn’t need to be like this.
Even if you do go away, stay on the voters roll. Usually the best way to do this is to ceremoniously register at a family members address, and make sure they keep you added to the electoral roll when the form comes around each year. Think of it like this, you haven’t emigrated or moved away, you are simply working away for the moment, and that work happens to be abroad. This is the single biggest thing you can do as a lenders main concern often is not what credit you have, but how easy are you going to be to find in the event you do not pay a bill. Having continuous voters roll registration at a property is going to reassure them you have been where you say you have, and usually this will hugely improve your score.
Secondly, it can be helpful to do two other things before you go;
- Register all bank accounts, phone bills, credit cards, and any other credit type agreements, to the same address as your voters roll address, and make sure you keep the payments up to date while you are away.
- Do not close all your accounts before you go. Keep on some small credit items to demonstrate that you not only have credit, but you pay it.
If you do this, then when you return to the UK after a period away, a potential lender can see where you have officially been and therefore should have limited concerns as to where you are, or where you are going to be if you stop paying for something, and also they can see you have maintained some credit agreements and paid them on time for an extended period. It sounds too simple, and really it is. Spending half an hour organising your voters roll and finances before you go away can potentially save you many hours of frustration when you return, could make the difference between being approved or declined, and can potentially significantly reduce the interest rate you are offered.