Credit Scores & Banking in Panama: What Expats Need to Know

Your US credit score does not transfer to Panama - you start fresh with no credit history. Panama uses ACODEC for credit reporting with bank-specific scoring, not FICO. To build credit, open a bank account, take small secured loans, use credit cards responsibly, and pay all bills on time. Banks are cautious with newcomers but secured loans are easier to obtain.

How Credit Works in Panama vs. the US

Panama's Credit System

Panama operates its own credit reporting system independent of the US system:

• Managed by ACODEC: The Association of Credit Bureaus oversees credit reporting in Panama
• Credit History Starts Fresh: Your US credit history does not transfer to Panama's system
• Local Banking Focus: Banks primarily look at your payment history with Panamanian institutions
• Different Scoring Methodology: Panama uses different criteria and calculations than US FICO scores

Key Differences from US System

No FICO Scores: Panama doesn't use the FICO scoring system. Instead, banks use their own internal scoring based on payment history with that specific institution.

Limited Credit Bureau Data: Only payment history is typically tracked—not credit inquiries or credit utilization ratios like in the US system.

Bank-Specific Credit Decisions: Each bank makes individual credit decisions based on their own criteria. Approval at one bank doesn't guarantee approval at another.

Building Credit in Panama

Starting from Scratch

When you arrive in Panama, your credit history is essentially blank. To build creditworthiness:

• Open a bank account and maintain it actively
• Make small loans and repay them on time consistently
• Use a credit card responsibly (if approved)
• Pay bills on time (utilities, phone, internet)
• Demonstrate stable income and employment

Getting Your First Loan

Banks in Panama are cautious with newcomers:

• Secured loans are easier to obtain (collateralized by deposits or property)
• Higher interest rates for those without credit history
• May require a co-signer (preferably Panamanian or resident)
• Start small and build your credit record gradually
• Keep evidence of income (pay stubs, tax documents, business records)

Factors Banks Consider

Employment & Income

• Stable employment history is critical
• Income documentation is required (pay stubs, tax returns)
• Local employment vs. remote work: Local employment is viewed more favorably
• Self-employed status requires 1-2 years of business history and tax documentation

Banking History

• How long you've held your account
• Account balance and activity
• Pattern of deposits and withdrawals
• Any overdrafts or negative incidents

Personal Status

• Residency status (pensionado, temporary, etc.)
• Length of residence in Panama
• Panamanian cedula (ID) is important for credit applications
• Previous credit history with Panamanian institutions

Credit Cards in Panama

Getting Approved

Credit card approval is stricter than in the US:

• Limited availability for newcomers without credit history
• Higher credit limits may require deposits or higher income documentation
• Multiple card rejection can damage your credit profile
• Annual fees are common on Panamanian credit cards

Building Card Usage

Once you have a card:

• Use it regularly but charge only what you can afford to pay
• Pay on time every single month (this is the most important factor)
• Keep utilization low (use less than 30% of available credit)
• Request credit limit increases after demonstrating reliable payment history

Mortgages & Real Estate Credit

Getting a Mortgage in Panama

Real estate financing has different requirements than personal credit:

• Down payment requirements: Typically 20-30% of property value
• Income verification: Usually requires 3-6 months of recent bank statements
• Property appraisal required
• Title insurance (check title carefully for liens)
• Debt-to-income ratio: Typically must be under 40%

Mortgage Terms

• Terms typically range from 15-25 years
• Interest rates vary by bank (typically 4-7%)
• All-inclusive fees and closing costs can be 3-5% of property price
• Both fixed and variable rate options available

The Bottom Line

Your US credit score means nothing in Panama. Plan to start building credit from scratch using local banking institutions, credit cards, and small loans. Demonstrate consistent, on-time payments and stable income to establish a solid credit foundation. Banks in Panama are more conservative than US banks, but building a strong local credit history opens doors to better rates and terms for mortgages, car loans, and business credit. Patience and reliability are key to financial success in Panama.

Related Panama Living Guides

• Explore Panama City on ExpatsList
• Financial Services in Panama
• Housing in Panama City
• Banking in Boquete

Offering financial services in Panama? List your business on ExpatsList.