How To Check and Increase Credit Score in UAE?
Introduction
Life uncovers many dynamic aspects through the years, and sometimes, we highly regard borrowing money from a genuine lender. But how will that lender believe in your deservingness if they are going to borrow you a hefty amount? This is where you need to rely on effective measures to achieve a high credit score. If you are confused about What Is A Good Credit Score in UAE, here we will unveil all the details regarding it.
A credit score is generally a three-digit number that showcases your creditworthiness as an account holder. The lenders will verify this number to check the credit risk before lending credit assistance and loans to the borrower. The credit score depends upon many significant elements, such as your transaction history, financial status, etc. Let us dive into the prominence of credit scores in Dubai to its core.
What Is a Credit Score?
When it comes to a credit score, it is known to be a three-digit number that comes under 300-900. It is basically a metric that a lender or any bank uses to predict how effectively you are going to pay your debts. Your credit score is dependent on a series of data from any reliable organisations or banks where you have opened an account or credit throughout the UAE.
The credit report will majorly involve outstanding payments, credit limits, and your payment history, including any returned cheques or missed payments. So, this process defines What Is Credit Score in UAE precisely.
How Are Credit Scores Calculated?
Calculating credit score in UAE is most probably similar if we compare it with the calculation process from other countries. However, there are some eminent differences. Nonetheless, it is a verification of your past creditworthiness and future risks of non-payment.
The following score is calculated based on your payment history on suitable liabilities. When it comes to Dubai, AI Etihad Credit Bureau (AECB) is in charge of issuing credit scores and reports to the account holders. The AECB will effectively gather data about your credit history along with phone bills, credit cards, mortgage instalments, loans, and much more.
The AECB will precisely compile all the information and will use the algorithm to verify the individual’s chance of missing payments within the upcoming 12 months. The respective forecast is given as a credit score in the form of a three-digit number. There are some factors that may hamper your credit score, and for your reference, we have mentioned them here:
Do you prioritise paying in full?
Do you pay your debts effectively on time?
Have you experienced any returned cheques?
Along with these factors, your financial behaviour can also influence your credit score to increase or decrease.
What Is a Good Credit Score in the UAE?
One of the major aspects that everyone in Dubai must be thinking about is, How to Increase Credit Score in UAE as a good credit score can attract a lot of benefits for you. There are multiple ranges of credit scores available in Dubai as it elevates the individual’s position of getting a loan approval. For your information, we have given all the ranges of credit scores and which range is considered to be viable and efficient in Dubai.
| Various Credit Score Ranges in Dubai | ||
|---|---|---|
| Score Range | Category | Stars |
| 300-540 | Extremely Low | 1 |
| 541-650 | Low | 2 |
| 651-710 | Medium | 3 |
| 711-745 | High | 4 |
| 746-900 | Very High | 5 |
In the UAE, a credit score above 680 is valued to be extremely good, as per the AECB. On the other hand, a credit score below 620 is considered to be bad and poor. This score can challenge you to qualify for a loan. For example, if you want to be eligible for a mortgage, you need to acquire a score between 651 and 710.
Various lenders will require different credit scores based on their own criteria and the type of credit you are approaching. So, appeal to different lenders and verify their credit score criteria. Moreover, you should consider How to Improve Credit Score in the UAE to acquire good lenders.
How To Check the Credit Score?
If you are confused about How to Check the Credit Score in UAE, you need to follow the detailed process.
Go through the official website of the AECB and access its home page.
You can also download the AECB mobile application to authenticate the process.
In the recent scenario, it costs around AED 84 to download the credit report.
Factors To Consider
Before applying for any type of loan or credit card ensure your credit score is enough to stay away from any potential risks.
You need to check your score prior to a few months, during which you can address certain issues that are somehow lowering your credit scores.
This is the precise answer to How to Check Credit Score for Free.
Factors Affecting Your Credit Score
Here, you can go through the eminent factors that adversely affect your credit score. You need to avoid all these respective factors to improve your credit scores to a vast extent.
Repeatedly applying for more credits
Every time you ask for a credit, a critical inquiry will be issued for your account. This will negatively impact your credit score as hard inquiry will question your authenticity. The inquiry will remain active even if the loan is not approved or granted by the bank or any lender.
Delayed Payments
If your payment is delayed for more than 30 days, your credit score in UAE will be hampered. The non-payment window is utilised to inform the credit reporting bureaus. This can highly lower your credit score in the UAE.
Cancelling out the zero balance credit cards
If you, as a cardholder, decide to do away along with a credit card, it can impact your score negatively. Credit card cancellation can decrease the total amount of credit and increase the ratio of credit utilisation.
Transfer of the balances to a single card
Most people consider carrying just one card as it will protect you from risks like theft and general maintenance. However, the upward balance will increase credit utilisation to a vast extent, which will impact credit scores.
Delivering authorisation to relatives who have unviable credit scores
Many people consider co-signing their accounts with a relative or friend. However, if you are co-signing it, you are responsible for their number of debts. So, there is a chance of you facing depreciation. So, always ensure considering How to Check My Credit Score and how the co-signed relative will consolidate all the payments on time.
How To Increase Your Credit Score In UAE?
Here are the tips of How to Increase Credit Score in UAE:
Diversify the credit line
If you have prioritised an unsecured loan beforehand, this time, try to opt for a secured one. Diversifying your credit score can improve the AECB credit score as well.
Prioritise Long-term Loans
A matured credit history can work as a major component to increase your credit score. If you consider long-term loans, your credit score will be elongated.
Pay the bills on time
It is always advisable to complete the basic tasks as effectively as possible. Make sure to pay the utility bills on time, as they can increase your credit score outstandingly. Ensuring no delays is a significant criterion that you need to fulfil.
Rectify your errors
As the report will consist of all the significant components, minor errors can impact your credit history. So, if you are encountering any errors that have the potential to negatively affect your AECB score, rectify them as soon as possible. You should also check your score at regular intervals, as we have already discussed How to Check AECB Score for Free.
Benefits Of a Good Credit Score
A good credit score in the UAE can benefit you through significant domains. Some of the advantageous factors have been given below:
Minimal Interest on Loans and Credit Cards
A high credit score will always amplify your creditworthiness. So, the lenders will always accept your appeals with a low interest rate.
Easy Sanctions
Your loans and credits can be easily sanctioned or approved with a good credit score in UAE.
Employment Chances
In most cases, employers will verify your credit report to analyse how effectively you are managing your credit. So, if your report is authentic enough, you may be rewarded with good job opportunities.
These are some of the benefits and by now you must have understood How to Check AECB Score and what are some of its rewarding solutions.
Frequently Asked Questions on Credit Scores in UAE
What is AECB?
AECB stands for AI Etihad Credit Bureau. It is known as a UAE government organisation that delivers credit reports to verify your financial obligations.
What is the AECB Credit Score in UAE Used For?
AECB Credit Score in UAE is used to verify your creditworthiness and your eligibility for accessing credit cards and loans.
What to Do if You Don’t Have a Credit Score?
If you don’t have a credit score, there are plenty of options available to initiate your credit file such as you can get a credit card or credit builder loan.
What factors can negatively impact your credit score?
Factors that can negatively affect your credit score involve delayed payments, frequent credit applications, high credit utilisation, poor credit mix, etc.
What is the minimum credit score required to apply for a loan in the UAE?
In the UAE, you need a credit score of around 580 to qualify for a loan. 580 is the minimum score, and you should consider tricks to increase your credit scores effectively.
What is the Minimum Credit Score required to get a car loan in UAE?
The reliable credit score to access a loan for a car will depend on the applicant’s other factors. However, the minimum score will be around 700 or higher which is accepted by banks.
What is your credit report?
A credit report is known to be your summary of past credit including how you have managed your debt and how effectively you are paying your debts.
How long does improving your credit score take?
It will take you 4-12 months to increase your credit score. This depends on your credit profile and how authentically you manage your finances.
Is a 600 AECB score good?
A 600 credit score will be considered in the range of low to medium. The maximum range should be around 746 to 900.
What is a poor credit score?
A poor credit score is between 300 and 540. So, if you have this score, try to improve it.
