What is an Excellent Credit Score in the UAE
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Credit score is a three-digit figure that indicates how well you can manage your finances and debts. Ranging between 300 and 900 in the UAE, credit scores are used by banks and financial institutions to evaluate applicants’ creditworthiness. This knowledge can be useful in gauging whether an applicant can be expected to repay their debts on time, the associated risks, and other defaults.
If you have an excellent credit score, you will be perceived as an applicant with high creditworthiness by most banks and financial institutions. This, in turn, facilitates speedy approval of loans, credit cards, and more.
Keep reading to find out what is an excellent credit score in the UAE and how you can get one.
Credit Score UAE - An Overview
The al etihad credit bureau (AECB) is responsible for calculating and generating aecb credit score in the UAE. Using transaction histories, utility bills, loans, and other data, the institution generates credit reports for the country’s individuals and companies.
Have a look at the following table for the general categorisation of credit scores in the UAE -
| Score Range | Category |
|---|---|
| 300 to 540 | Very Low |
| 541 to 650 | Low |
| 651 to 710 | Medium |
| 711 to 745 | High |
| 746 and above | Very High |
As we can see, credit scores above 710 are considered ‘high’ scores. However, a credit score of 700 is generally considered a good credit score for practical purposes in the country.
It’s worth remembering that credit scores vary with fluctuations in payments due to their dynamic nature. For this reason, missing a few payments might lower your credit score even if you have a stellar history of being able to pay off your debt in the past years.
Why is an Excellent Credit Score Crucial in the UAE?
Consider two different scenarios: Person 1 gets approval for a credit card with a considerably high limit. Person 2, on the other hand, fails to get approval for a loan. The credit score is significant in each of these scenarios.
In the UAE, lenders and financial institutions use your credit score to decide your creditworthiness. This score impacts not only the approval but also the terms on which you get approval for new credit. With a higher credit score, you can enjoy easy approvals as well as better terms on loans or credit cards.
Here are some benefits of having an excellent credit score in the UAE:
Quicker Credit Approval
A poor credit score can minimise your chances of approval for loans irrespective of your income. Possessing a high credit score gives you advantages in terms of swift approvals for new credit, whether in the form of a loan or a credit card.
Lower Interest Rates
Besides approvals, another benefit that you can enjoy with a good credit score is that interest rates are likely to be significantly lower for you.
Better Credit Terms
Finally, with a high credit score, you are likely to receive loans and credit cards at a more favourable term than others. This may include higher loan amounts, credit limits, and so forth.
How to Get an Excellent Credit Score?
Having understood what is an excellent credit score in the UAE, let’s take a look at some tips to improve your score -
- One of the most essential variables that affect your credit score is whether you pay your payments on time. Your credit score might be lowered by making late payments. For this reason, make sure to pay all your bills on time each month.
- Regularly check your credit score and report to make sure that all the information is valid. Your credit score might also be lowered by errors in your credit report.
- Multiple credit card or loan applications lead to multiple hard inquiries, which can bring down your credit score. Thus, avoid multiple credit applications at a time and apply for credit only if you need it.
- Resolving your debt can assist in raising your credit score. Try to settle any unpaid debts as quickly as you can.
- Your credit utilisation is referred to as the percentage of your total credit that you currently use. Maintaining a low utilisation ratio here can improve your credit score.
- Avoid closing out-of-date credit accounts as doing so will lower your credit age, which can hurt your credit score.
- Lenders frequently favour a good credit mix that includes credit cards, loans, and mortgages. The ability to safely manage various credit kinds is demonstrated by a diversified credit mix, which raises your credit score.
How Can I Check My Credit Score?
You can download the AECB mobile app to check your credit score and view your credit report in the UAE. Once downloaded, simply follow the prompted steps to check your credit score and report. Note that you can also obtain your credit report and check your credit score online through the official website of AECB.
With Policybazaar.ae, you can check your credit score range for free when you apply for a credit card or loan through our platform. Simply click on ‘Banking Products’ above and choose the ‘Check Free Credit Score’ option.
Wrapping Up
As we saw above, credit scores above 710 are considered ‘high’ or excellent scores for the UAE. With a high credit score, you demonstrate your creditworthiness, which can bring you benefits such as quicker credit approvals, access to loans and credit cards with reduced interest rates and better conditions, and so on.
To improve your credit score or maintain it, make sure to follow the tips discussed earlier. By being punctual with your payments, maintaining low credit utilisation, clearing your debts, and so on, you can build your credit score over time.
To check your credit score range for free, continue on Policybazaar.ae and head to our ‘credit score’ section.
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| Credit Score for different types of Loan | |||
|---|---|---|---|
| Credit Score for Personal Loan | Credit Score for House Loan | Credit Score for Car Loan | Credit Score for Student Loan |
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