Unlocking the Mystery: How to Achieve and Maintain an Excellent Credit Score in the UAE

Mar 27, 2023

Having a good credit score is essential for obtaining financial services in the UAE. It is a three-digit value assigned to individuals based on their financial activities, such as debt repayment schedule, number of active loans, and on-time or delayed bill payments. A good credit score can help you get loans and credit cards at reasonable interest rates and with a higher credit limit.

Building a good credit score is not easy, as it requires continuous effort in managing finances, paying debts and monthly payments on time. However, there are some steps you can take to improve your credit score quickly. These include paying bills on time, keeping credit utilization low, and regularly checking your credit report. Additionally, you should avoid taking out too many loans or credit cards, as this can have a negative impact on your credit score. By following these tips, you can ensure that your credit score remains healthy and you have access to the best financial products in the UAE.

WHY IS YOUR CREDIT SCORE IMPORTANT IN THE UAE?

Banks and other financial institutions in the UAE will always check your credit score before providing you with a loan or a credit card. Your credit score is a reflection of your financial stability and how you manage your finances, and a good score can help you get quick approval with preferential rates and benefits.

However, it is important to remember that credit score is not the only factor that banks consider. Age, location, monthly income, and the number of active loans are all taken into account when assessing your risk profile.

HOW CREDIT SCORES WORK IN THE UAE?

Al Etihad Credit Bureau (AECB) is a top financial authority in the UAE that analyzes your credit score and financial data. This data includes your payment history of all monthly installments, credit card bills, utility bills, telecommunication bills, and more. AECB creates credit reports and makes them available to all financial institutions, money lending bodies, organizations, and individuals. This helps providers of banking products make informed decisions about the approval and extent of credit on items such as mortgages, car loans, credit cards, and more.

In short, lending institutions assess your credit report alongside other factors to determine if you can manage to pay for additional debts while still meeting your other financial obligations. The approval or rejection of your application is based on this assessment. To ensure your application is approved without any issues, it is important to improve and maintain your credit score.

WHAT IS A GOOD CREDIT SCORE IN UAE?

In the United Arab Emirates, a good credit score typically ranges from 700 to 900. This indicates that you have a strong credit history and are considered a low-risk borrower. Here are some key points to keep in mind about credit scores in the UAE:

Credit scores range from 300 to 900, with higher scores indicating better creditworthiness.
A credit score of 700 or above is generally considered a good score in the UAE.
Lenders use credit scores to evaluate your creditworthiness when you apply for loans, credit cards, and other forms of credit.
A good credit score can help you qualify for lower interest rates and better terms on credit products.
Your credit score can be impacted by factors such as payment history, credit utilization, and length of credit history.
It is important to check your credit report regularly to ensure that your credit score is accurate and up-to-date. Doing so can help you maintain a good credit score and ensure that you are able to access the best credit products available.

HOW TO BOOST YOUR CREDIT SCORE IN THE UAE?

If you're looking to apply for a credit card in the UAE, it's important to first check your credit score. Don't worry if it's not looking great, as there are several fast and effective ways to improve it!

Making extra deposits
Paying bills on time
Getting a new credit card
Clearing existing dues
Checking your credit report
Managing existing credit cards effectively
Applying for multiple loans are all great ways to boost your credit score

HOW TO CHECK CREDIT SCORE IN UAE?

Visit the Al Etihad Credit Bureau (AECB) website at https://aecb.gov.ae/.
On the homepage, click on the Credit Report tab and select Individual Credit Report.
Register for an account on the AECB website using your Emirates ID, mobile number, and email address.
Verify your identity by entering the OTP sent to your registered mobile number.
Follow the prompts to generate your credit report, which will include your credit score, credit history, and any outstanding debts or loans.
Pay the fee for the credit report using a credit card or online banking.
Once payment is confirmed, you can download your credit report and review your credit score.

HOW TO ACHIEVE AN EXCELLENT CREDIT SCORE IN UAE?

Paying your bills on time: Payment history is the most critical factor in determining your credit score. Paying your bills on time is a simple way to improve your credit score. Late payments can hurt your credit score and stay on your credit report for up to seven years.
Keeping credit utilization low: Your credit utilization is the percentage of your available credit that you are currently using. It's recommended to keep your credit utilization below 30% of your available credit. For example, if you have a credit limit of AED 10,000, you should keep your balance below AED 3,000.
Having a mix of credit accounts: Having a mix of credit accounts, such as credit cards, auto loans, and mortgages, can help improve your credit score. However, it's important to use credit responsibly and only take on credit that you can afford to repay.
Keeping credit accounts open: The length of your credit history is a factor in determining your credit score. It's essential to keep your credit accounts open, even if you're not using them. Closing a credit account can shorten your credit history and hurt your credit score.
Monitoring credit report: It's important to check your credit report regularly to ensure that all the information is accurate.

HOW TO MAINTAIN AN EXCELLENT CREDIT SCORE IN UAE ?

Maintaining an excellent credit score is important because it can impact your ability to obtain credit and loans with favorable terms. Here are some tips to help you maintain a good credit score:

Work with Banqmart relationship officer: A dedicated relationship officer can help you manage your credit score and provide personalized guidance and advice on how to maintain a good credit score.
Continuously paying bills on time: Consistently paying your bills on time is essential to maintaining an excellent credit score.
Keeping credit utilization low: It's important to continue to keep your credit utilization below 30% of your available credit.
Avoiding applying for too much credit: Applying for too much credit can hurt your credit score by creating multiple hard inquiries on your credit report.
Monitoring credit report: Continuously monitoring your credit report can help you identify any errors or fraudulent activity.
Using credit responsibly: Using credit responsibly, such as paying off your balances in full each month, can help you maintain an excellent credit score.

Achieving and maintaining an excellent credit score requires responsible credit use and management. Paying your bills on time, keeping your credit utilization low, having a mix of credit accounts, and monitoring your credit report are all important factors in maintaining a good credit score.

By adhering to these tips and with the assistance of Banqmart's committed relationship officer, you can attain and sustain an outstanding credit score. A superior credit score can unlock new prospects for you, including reduced interest rates, improved loan conditions, and increased credit limits. Therefore, do not hesitate to contact Banqmart and commence your journey towards a better credit score today.