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Nitin Arora, a 35 year old senior merchandiser, is planning to move to Kenya soon for better career opportunities and global education and scope for his children. He has two children, aged 9 and 12 respectively and a wife as dependent.
Apart from the property that he owns, he also has invested in a term plan and a medical policy. He had also been repaying the debts taken by him for his higher studies and marriage of his younger siblings.
While he was in the process of doing the relieving formalities from his current employer in India, one thing that constantly struck his mind was that should he take relocation as an opportunity to get clean from the pressure of debts which he had been paying since last so many years or should he play loyal to the financial machinery of the country?
Several thoughts and suggestions kept flashing, most of them negative! For example, who would hunt for him to get EMIs paid when he’ll be abroad and even the Aadhar or defected CIBIL won’t affect his earnings outside.
The fact is he was altogether wrong in thinking so! Just to be sure of things, he reached out to a professional counsellor of CreditSeva and that is where he saved himself from making one of the biggest mistakes of his lifetime. This is where he was corrected! He got to know the real do’s and don’ts of credit while moving abroad and hence he saved himself from a big hassle. We are sharing his learnings with you here:
1. Clear all your outstanding before you move abroad:
Though moving abroad seems to be tempting and one-stop-solution to get rid of all your dues however it is essential that you clear off all your outstanding dues and EMIs before you actually move out! If you are wondering why this is being given as the topmost advice, then please be informed that if you ever return to the country, you will not be entertained for any credit, loan or card by any bank or financial institution. The non-payment of dues for a long period of time and being absconding on top of that can completely damage your portfolio and it might take you years at that time to rebuild your trust again.
If you are thinking to not to return ever, then the only suggestion is – Think Again! What if global conditions or some situation in the country that you are moving to forced you to come back? Thought about this?
2. Convert your bank accounts to NRO/NRE/FCNR:
This is important! Before you move out of the country, update your KYC and then convert your Savings Account to an NRO (Non-Resident Ordinary Account), NRE (Non-Residential External Rupee Account) or FCNR (Foreign Currency Non-Resident Account). If you are wondering why this then here’s the answer – It is very difficult and hassled to make payments from an overseas account. Also, it is illegal in India to have regular savings account if you are a resident abroad.
The above-mentioned types of accounts keep your financial portfolio alive in India in addition to making your payment procedure easy. If you are looking to push your account with both foreign and Indian currency then you should choose one out of the latter two i.e. either an NRE or FCNR account.
It is also imperative, that you don’t close all your Indian bank accounts in one go. The reason is simple that if you do so, you’ll not be able to prove to any lending agency your repayment behaviour and hence they’ll start doubting your payment capability. This will also lower your current Credit Rating immediately hence be warned not to do so immediately. Go step by step!
3. Don’t surrender all your Credit Cards:
Yes, this is rightly said! Either you should own a credit card that can be used internationally or you should surrender your current one to get an international one but the important point is that don’t surrender all your credit cards in one go and repeat the mistake mentioned in the earlier point.
A purchase once or twice a year is sufficient enough to keep your financial portfolio alive in India. So keep at least one credit card of the Indian system. This way, you’ll not have to rebuild your credibility whenever you return and will also provide you immediate credit facility if you ever visit unplanned.
4. Inform the Credit Bureaus about your abroad movement:
Again this is imperative that you inform the Credit Bureaus (CIBIL, Equifax and Experian) that you are moving abroad. This can save you from any fraudulent activity. At times, criminals detect that you have an inactive account and by forging your identity they can use the account to apply for loans in your name, thus impacting your Credit rating and above that make you pay something that you have not borrowed or are not even aware of.
Not only this, you should also check your Credit report occasionally so that if some such sort of mischief happens you are immediately aware of and can take action against it.
All in all, it is advised that it would never help leaving your debts uncleared when moving overseas. In future, if you ever plan to return or have to return due to any emergency it could be a great problem for you. Also, you might not be able to carve a trustworthy figure again in the banking system of the country and even if you do it might take you years to come to a level where lenders and financial institutions will start trusting you again. So, instead of taking the risk it’s good if you go strong and feel strong when you return.
This was also the advice to Nitin who showed wisdom in reaching out to a professional agency in order to understand the credit do’s and don’ts when moving out of the country. In case, you are also planning to move out, then explore the below-given link to manage your credit well!
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