How to Build Up UAE Credit Score?

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credit score UAE is a 3-digit number that predicts how likely one will make credit card and loan payments on time in the rest of the year. This number ranges from 300 to 900; a low score indicates a high risk of non-payment, while a high score indicates reduced risk.

Though the concept of credit score is relatively new to the UAE, it is now used widely across all financial institutions, including banks, to make lending decisions.

Mode of working

Credit scores are generated by the use of statistical models, pulling in data from one’s credit profile. Such data typically includes one’s payment history with regard to card payments, utility and telecom bills, and prior instalments of loans.

In the UAE, credit scores are calculated by the AECB (Al Etihad Credit Bureau), which generates credit reports for the sake of companies and individuals. Financial institutions use credit scores for supporting their criteria of decision-making on credit products like credit cards, mortgages, personal loans etc.

Can it be changed?

It is possible to proactively change one’s AECB credit score. As per the AECB, credit scores are dynamic and can be altered as per the most recent information in one’s credit report. The score can be improved by paying bills on time and lowering the amount of one’s outstanding debt as well as the number of products related to credit.

Composition of credit score

  • Bill payment history accounts for 35% of credit score
  • The level of debt on one’s personal credit card carries 30% weightage
  • Age of history of personal credit card accounts for 15% of score
  • Kind of credit account carries 10% weightage
  • The number of credit inquiries makes for 10% of the score

Tips to improve credit score

  • Get a new credit card:

If one suffers from irregular loan repayments, one must get a new credit card and pay one’s bills on time.

  • Talk to banks

Try negotiating with one’s bank by clearing at least half of one’s loan instalments or credit card bills. Banks, in turn, can talk to the AECB regarding partial clearance of dues which will boost the credit score.

  • Review report

Check whether there have been any mistakes made in the AECB credit score check. Get a copy of score details, correct any mistakes and ensure regular updating.

  • Pay bills on time

Make sure one pays up all bills on time like credit card bills, personal loan instalments, etc.

  • Manage loans and credit cards

Clear any existing loans. Avoid using too many credit cards and do not leave any credit card account dormant.

In sum, these are tips to build up your credit score in UAE.

Know more about mortgage in Dubai here.

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