The Expats Guide to Building Credit in Germany

Sharon  @GoodMigrations

Having a good credit score is very important to your finances. You may not realize it now but it affects many things in your life: Your credit score can determine whether a landlord will rent to you or not; it can affect your ability to get a mobile phone or a mortgage on a house; it can even prevent a bank from loaning you money to buy everyday things (which means no credit cards since those are basically loans). So what do you do as an expat in a new country with no credit?

Our guide below will help outline the steps needed to establish yourself in Germany as an expat so you can begin building credit (and test your pronunciation abilities because German government terminology is not known for its brevity).

Let’s start with a brief education of the German credit system as it can be confusing for many.

The Schufa

Germany’s sophisticated credit system is called the SCHUFA (shorthand for Schutzgemeinschaft für Allgemeine Kreditsicherung).  As a resident of Germany, this system immediately begins collecting data on your financial history in order to calculate a score. This score will then stay with you for the duration of your residency in Germany.

The Schufa is based on a 100-point scale and gets “dinged” when you are delinquent on payments.  Beyond that, exactly how this score is calculated continues to be a mystery. We do know that scores around 90 are considered positive and should not negatively impact you with lenders.

Every resident is entitled to one free copy of their report per year. Should you need to request an additional copy the Meineschufa website is a great resource to check out.
Meineschufa- Schufa

Building credit in a new country takes time. So be diligent about paying bills in full on time.

The Anmeldung

Understanding the Schufa is important for all German residents. However, before you can even get a Schufa you must first go through the registration process known as ANMELDUNG.

The Anmeldung is an official document that every foreigner must submit within 14 days of arriving in Germany.

The Anmeldung requires you to register your address and this registration will be requested wherever proof of residency is needed. Getting health insurance and enrolling in a university are just two examples where proof of residency is needed. Proof of address is also needed in everyday things like getting a phone, setting up internet, and signing up for utilities.

How to file the form

You will need to visit a Bürgeramt office to actually file the Anmeldung form.  Their website and the link above will help find an office near you.

It’s recommended to use the Appmeldung website to fill out the form prior to your appointment at the Burgeramt. Not only will it save you time, but you can view it in English from various cities. The printed forms at the facility will most likely only be available in German.

Appointments are in high demand and sometimes fill up weeks out so be sure to book your appointment as soon as you know your arrival date. Walk-ins are an option as well if you are prepared to wait. If so we recommend you show up early, preferably 15 minutes before the Burgeramt opens.

What to bring to your appointment

  • Passport or National ID
  • Bring your tenant contract. If you are staying with a friend or relative, then have them sign a letter of reference. Here is a good example of a letter of reference courtesy of Settle in Berlin.
  • A signed “Wohnungsgeberbestätigung,” which is a document from your landlord confirming that you live there.
  • Your completed registration form for the Anmeldung already filled out.

Once you’ve completed the Anmeldung process, you’ll receive a Meldebescheinigung, which is the official certificate of completion.

It’s important to understand the Anmeldung and Schufa process because these are the first steps to building credit in Germany. And it’s important to know this because these documents are needed in order to obtain many everyday items. Here are a few things that can start helping you build credit and some tips along the way.

Opening a Bank Account

If you are planning on living long-term in Germany then a Current account is wise to have, if not necessary. Some banks will accept applications online but it is advised to visit a local branch to submit all the paperwork.

You will need to bring:

  • Your passport or National ID
  • Proof of address registration (Meldebescheinigung – discussed above)
  • Your university registration if you are a student
  • Some banks will ask for proof of income. To be safe bring your letter of employment with salary information if possible. Your last three paychecks will also work.

For foreigners moving to Germany without a local bank account, we recommend checking out the bank N26. The blog “Settle in Berlin” highlights other competitors, but N26 is a good choice for expats without residency. It may be the lesser-known name, but it is one of the only banks that does not require German residency (aka the Anmeldung). Other benefits like English support are listed below. The big banks in Germany, that you may also want to look into, are ING, Deutsche Bank, and Commerzbank.
German Bank Comparison

Renting an Apartment

Typically, landlords will request your SCHUFA in order to rent you a flat. When a landlord does this it is usually only the Schufa Statement, which doesn’t show your entire financial history. It is a high-level report and only displays if you have any negatives.

Documents you will need to rent:

  • Passport
  • Einkommensnachweis — proof of income from the past three months.
  • Mietschuldenfreiheitsbescheinigung — a signed document from your last landlord confirming that you’ve paid your rent in full and on time during the course of your tenancy.
  • Schufa
  • Bank statement (optional)— but only if you have a sufficient amount saved.

If you have never rented in Germany before, then it will be hard to obtain a signed Mietschuldenfreiheitsbescheinigung. If you are renting through Airbnb, you could ask your host to sign one, although it is a long shot. You can also ask your landlord from your previous country to sign one and then have it translated to German. Here is a sample of a German Mietschuldenfreiheitsbescheinigung you may consider using.

Without an address, you will not be able to file the Anmeldung which means you will not have a Schufa. In this case, you may want to consider alternative housing options.  Sites like Wunderflats and WG-Suche.De offer short-term rentals, furnished rentals, and flat-sharing options. Also, Berlin Craigslist could be something to look into.

Getting A Mobile Phone

Before you get a phone you should decide whether a prepaid plan or a contract plan is best for you. If you are staying for a short time, then a prepaid plan might be a good option.

However, for most expats, our time in a new country is for years or an unspecified amount of time. In that case, we recommend looking into a contract plan with a phone provider. If you already have the phone you want, then consider looking into a SIM-only contract. Otherwise, you will need to get a traditional contract including service and phone.

In either circumstance, you will be asked to your passport (or National ID) and your registration certificate, the Meldebescheinigung from completing the Anmeldung process.

A few providers:

If you have not registered your address and received your Meldebescheinigung yet then you may need to consider alternatives. No phone provider will give you a contract on a phone without it. Check out our article on Keeping Your Phone Overseas to hear alternatives and temporary solutions.

As an expat planning on staying in Germany for the long haul, it is important to establish yourself in the areas discussed above. Registering your address immediately is a crucial part of the process and is the starting point.

Taking these steps will ensure that you can begin building good credit quickly which will prove to be a worthwhile endeavor. If you decide you want credit cards, to lease or buy a car or purchase a home then having good credit will be required. Pay your bills on time and enjoy!

Building Credit in the United States – An Expats Guide

Michael Boateng @GoodMigrations

What’s all this talk about Credit?

There are so many things to think about when getting ready to move to the United States:  where to live, how to get there, making friends and what you’ll need to buy. Have you thought about how you will get a local cell phone or open up a U.S. bank account? These are just a couple of things that require you to have credit.

When moving to the US, learning about the credit system can eat away at the excitement of your amazing journey. We get it: it’s a boring and confusing topic. While learning how to get credit, you may experience the following side effects: anger, fear, hope, and calm. If it makes you feel better, even many individuals born in the States are still confused about their own system.
wallet with credit cards for GoodMigrations

What is Credit?

Your Credit Score is a statistical tool to predict the likelihood of you defaulting on your credit obligation. There are a dozen different Credit Scores built with algorithms to predict the likelihood of default on a particular type of credit (credit card, car loan, car lease, etcetera). The Credit Score is a tool to allow increased retail consumption.

It allows you to rent an apartment, get credit cards, and purchase a mobile phone by showing that you’ve borrowed before and paid it back consistently. Read more…

Moving Quotes: Binding vs Non-Binding

Sharon  @GoodMigrations

Getting ready to move? Whether its an inter-state, domestic or overseas move, you will want to request quotes from a few moving companies. Read our 6 Steps in Hiring an International Mover before you begin this process. One of the biggest misconceptions that customers make during the quoting process is thinking that their quote is “binding.” In other words, the price estimate you get before the move is the amount you will pay after the move. This is not true! Why? You may ask? Because some quotes are binding but most, like 90%, are non-binding.

It’s important we understand these terms and understand how they can help or hurt us during our moving process and avoid extra costs on moving day.

BINDING QUOTES

This type of quote is not very common, especially with overseas moves, but it is simple and straight forward. A Binding estimate states that the price you are quoted will be the amount you pay on delivery. Regardless if weight or volume increase or decrease. Another good name for this is “fixed priced.” This agreement works out to be the most “fair” agreement if all parties are honest.

A few things to note if you do come across a binding quote.

  • The quote must accurately detail what will be shipped, and the services offered. If you need “extra” services that aren’t included, then you must be billed separately for these.  Long carry charges and shuttle fees are usually not included in a binding quote.
  • For an estimate to be binding a copy of the quote must be provided to the customer prior to the move and it must state it is binding.
  • A copy of your binding agreement must be included with your bill of landing.
  • Ensure everything you want to ship is clearly listed on your inventory sheet. Avoid adding additional items after the agreement has been set. If on moving day, the mover feels you have added items not included then they can refuse service. Typically, a mover won’t make a stink over something small but that is not a guarantee.
    Moving Estimate Image

Read more…

Expat Life as a Millennial LGBTQ

Michael Boateng @GoodMigrations

Hi, my name is Michael Kwadjo (Qweh-joe) Kyei Boateng. I am a first-generation Ghanaian immigrant who feels like an expat of the world.

I was born in New York (shout out to the Bronx!) and raised by my mother. She would send me to live with family around the world while she worked a full-time job as a live-in nurse.

I’ve had the privilege of living in Ghana, England, the Netherlands, Brazil, Australia, and the United States. As an openly Queer African American who rose up from a low-income childhood, I have had several different experiences on how my identity relates to different countries, cities, and communities. Each place I’ve lived abroad has helped teach me something about my own identity and how I can find peace and support to thrive and just be.

I’ve enjoyed learning about all the amazing LGBTQ leaders such as Marsha P. Johnson, Bayard Rustin, Audre Lorde, and more that have opened new frontiers for our community. In honor of Pride Month, I want to reflect on my expat experiences and share a bit so that my fellow LGBTQ community members can find new places around the world to explore and uncover the love and joy of being LGTBQ.

(*Disclaimer, the experiences and insights I plan to share are based on places I’ve lived or visited abroad. I still have a lot to learn about being Queer and the many intricate and intimate forms in which it shows itself. Also, to keep things simple: “Queer”, a term which has several roots and connotations, is how I identify currently. I use Queer predominately as a verb – for me, it means to radically disrupt systems and preconceived notions of gender, sex, and identity. I know, I know, a bit wordy, but truly the term is loaded. If you want to know more, I recommend reading, Queer: A Graphic History by Meg-John Barker or A Queer History of the United States by Michael Bronski.)

The purpose of this guide is to help future LGBTQ members find cities around the world where they can enjoy living and be themselves. Okay, let’s get started! Read more…

Expat Life Guest Posts

Are You Financially Ready to Move to Singapore

Sharon  @GoodMigrations

Singapore has been rated as the best place in the world for expats, but Malaysia isn’t far behind. 55% of expats live in a home they consider nicer than before they moved to Malaysia and 61% find it’s easy to make friends.

Before you make the leap, you need to make sure you are financially ready. Depending on where you currently live, you may be looking forward to lower living costs in either Singapore or Malaysia. Getting your finances in order and understanding all the costs should be your priorities prior to take off.
Singapore Skyline

Living Costs: Malaysia

Despite being a modernized country with plenty of luxuries, Malaysia offers relatively low living costs compared to Europe, Australasia, and North America. It is estimated that a single person could live comfortably in Kuala Lumpur for $470 USD a monthFor that amount you will have a comfortable room in a modern, furnished apartment, you will eat well, and you’ll still have money left over for entertainment and travel.

For additional context, a mid-priced meal for two will cost around $17, while a cheap meal out could come to just $5 per person. Shopping in the local supermarkets and cooking from home makes life affordable for most people on an average American wage. As long as you have enough for several months’ worth of rent and living costs, then you should be all set to make the move.  Read more…

Expat Life

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