What Does a 570 Credit Score Mean?

In the UAE, credit scores typically range from 300 to 900. With a low credit score, your chances of securing new credit cards or loans would be on the lower side. In this article, we will specifically discuss what a 570 credit score means in the UAE and whether it is sufficient to get new credit in the UAE.

What Does a 570 Credit Score Mean?

A credit score of 570 is classified as a below-average or low-category credit score, with an equivalent rating of 2 stars out of 5. Individuals with this credit score may face difficulties in getting approvals for their applications for loans and new credit cards.

Credit Score Range	Category	Star Equivalent
300 to 540	Very low	1
541 to 650	Low	2
651 to 710	Medium	3
711 to 745	High	4
746 to 900	Very High	5

The chances of approval for credit facilities with a 570 credit score depend on the lender's risk appetite. If the lender is willing to take on low creditworthy customers, one may be able to obtain most of the available credit facilities. However, even if approval is granted in this case, the said individual will likely be charged a comparatively higher interest rate on the loan as the bank or provider would be taking on greater risk.

Credit Cards for 570 Credit Score

Individuals with a credit score of 570 may apply for both secured and unsecured credit cards. However, obtaining the latter type of credit card with such a low credit score is often difficult, as financial institutions consider it a risk due to the borrower's unfavourable credit history.

Secured credit cards are typically easier to obtain with a 570 credit score. With secured credit cards, the respective bank does not have to worry as much about credit card bill payments as the cardholder is required to submit a collateral sum up to the credit card limit. In case the cardholder fails to make timely payments, the bank may use the collateral to cover the due credit card bill.

Keep in mind that even if you get approved for unsecured cards with a 570 credit score, you may be charged high interest rates.

Personal Loan for 570 Credit Score

Obtaining a personal loan with a 570 credit score is often easier compared to other credit products. However, the approval of the application is still subject to the amount requested by the borrower.

While lenders typically do not accept loan applications from individuals with low credit scores, in some cases, they may be willing to provide a personal loan at a higher interest rate. The approval of a personal loan application may also be influenced by other factors, such as the loan amount, loan tenure, and the borrower's monthly income.

Compared to other types of loans, individuals with a credit score of 570 may have a higher likelihood of being approved for a personal loan. However, it is still advisable to maintain good credit behaviour and consider factors that may impact loan approval.

Homes Loans for 570 Credit Score

When it comes to mortgage loans, financial institutions mostly reject loan applications from candidates with low credit scores. Given the higher loan amounts involved in home loans, obtaining a loan with a credit score of 570 is typically difficult. 

However, in rare circumstances, lending institutions may agree to provide a mortgage loan but with less favourable terms, such as requiring collateral or imposing higher interest rates and lower loan amounts. Acquiring a home loan against property may be an option with a 570 credit score, but improving your credit score remains advisable to strengthen the chances of approval. 

By taking measures to improve your credit score, you may enhance your profile and improve your chances of clearing the eligibility for more favourable loan terms and securing a mortgage loan with more ease. 

Auto Loans for 570 Credit Score

Getting a car loan with a credit score of 570 can be challenging. Even if approved, lenders typically offer less favourable terms, such as higher interest rates and lower loan amounts, for car loans with a 570 credit score. 

If you are experiencing difficulty in obtaining approval for a car loan due to a bad credit score, you should consider improving your credit score before pursuing additional lending options. Furthermore, you can consider seeking out financial institutions that offer secured loans that require collateral in exchange for the loan to increase your chances of approval. 

Insurance Plans with 570 Credit Score

Insurance companies often examine an individual's credit score to determine their insurance premium rates. Although the impact of credit score on insurance is less compared to credit products, if you have a credit score of 570, you may be subject to higher premium payments.

On the other hand, significant improvement in your credit score can lead to a reduction in the cost of your insurance plans. For this reason, it is highly recommended to maintain a good credit score as it may result in lower insurance premium rates.

To improve your credit scores, you can demonstrate responsible credit behaviour and make timely payments. We will take a look at these tips (and more) closely in the next section.

Tips to Improve 570 Credit Score

Now that you know it is difficult to get a loan or credit card with a 570 credit score, let’s take a look at some effective hacks that can contribute to improvement in your credit score -

• Timely Bill Payments - Paying bills on time is an essential aspect of maintaining a good credit score. Late or missed payments can negatively affect your creditworthiness and reduce your credit score. It is because timely payments demonstrate financial responsibility and help establish a positive credit history. Payment history makes up a significant portion of a credit score, which is 35% in the UAE. Promptly paying bills shows reliability to lenders and creditors. In addition to that, consistently paying bills on time can help you qualify for lower interest rates and better loan terms. Thus, timely bill payment is crucial for maintaining a healthy credit score and managing your finances better.
• Make Right Credit Usage - Using credit responsibly is key to improving and maintaining a healthy credit score. One of the main factors contributing to a credit score is credit utilisation, which is the percentage of available credit that you are using currently. To enhance your credit score, thus, you can start using credit wisely. This includes keeping credit card balances low, making timely payments, requesting credit card providers to increase the total credit limit, and more.
• Clear Out Existing Loans and Debts - Clearing out existing loans is a crucial step in improving your credit score. Outstanding loans can adversely impact credit scores if not paid off in a timely and responsible manner. High debt-to-income ratio and payment delinquencies can lower a credit score, making it difficult for you to qualify for loans and credit products in the future. Clearing out debts and loans, on the other hand, reduces your debt-to-income ratio and shows positive credit behaviour, both of which can help increase your credit score. As a result, if you pay off your outstanding loans on time, you can enjoy better credit terms and qualify for lower interest rates and higher credit limits.
• Avoid Making Credit Inquiries Frequently - Restricting the number of credit inquiries is crucial in improving and maintaining a high credit score. Credit inquiries occur when a lender or creditor requests to review an individual's credit report, which can negatively impact their credit score. Frequent credit inquiries may signal to lenders that you are in financial distress and applying for multiple credit products, which may increase your risk of defaulting on payments. Thus, it is advisable to avoid frequent credit inquiries to maintain a positive credit history. As per experts, you should limit credit inquiries and only apply for credit products that you genuinely need. By doing so, you can avoid unnecessary credit inquiries and avoid the reduction of your credit score.
• Avoid Multiple Loan and Credit Card Applications - Limiting credit card and loan applications is essential in maintaining and improving a healthy credit score. Multiple credit applications may suggest to lenders that you are experiencing financial difficulty, which can hamper your creditworthiness. Another point to keep in mind is that each credit application results in a hard inquiry on your credit report, which can lower your credit score if done frequently. For this reason, you should limit credit card and loan applications to only those necessary and wait for a reasonable period before applying for additional credit products.

How to Check Your Credit Score for Free?

To check your credit score in the UAE, you can send an online request to the al etihad credit bureau. For this, you would need to pay a certain fee to the AECB as well (AED 10.5 for checking your credit score as an individual).

With Policybazaar.ae, you can check your credit score range for free. In collaboration with the AECB, we provide a credit score range without any charges. However, keep in mind that although you can generate credit score ranges via our digital platform, you would need to visit the AECB portal to get your credit report.

Here’s how you can check your credit score range through Policybazaar.ae -

• Open our website and click on the ‘Banking Products’ drop-down menu.
• Select the ‘Check Free Credit Score’ option.
• Enter the details as prompted and proceed accordingly.
• Submit the entered information and receive your credit score range on the registered email ID.

In a Nutshell

For individuals with a credit score of 570, it is highly recommended to make constant efforts to enhance their credit scores. A low credit score can result in multiple challenges when applying for credit cards or loans, primarily in the form of rejection of application or approval at unfavourable terms.

By following the tips discussed in the article above, you can easily boost your credit score. With that said, it is important to be patient and cultivate healthy credit habits in the long term to observe a noticeable improvement in the score.

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