What Does a 560 Credit Score Mean?

A credit score, indicating the creditworthiness of an individual, is one of the primary factors considered by banks when analysing an application for a loan or a credit card. In the UAE, credit scores span in the range of 300 and 900. While a good credit score may increase your application’s approval chances, having a bad credit score may lead to direct rejection or approval with a higher rate of interest. For individuals with a 560 credit score, ‘is 560 a good credit score’ is a question that arises often.

To understand the credit score of 560 and whether you will be eligible for a new credit card or loan in detail, continue reading the article below.

560 Credit Score – An Overview 

For the UAE, the al etihad credit bureau is responsible for analysing and providing the credit score of an individual as well as a company. It gathers all the relevant information from different sources like banks, government agencies, and more to assess the final result. 

As per the UAE norms, a credit score of 560 will be considered a ‘low’ score (with its corresponding star rating being 2 out of 5). Individuals with such a credit score generally face several difficulties in obtaining a new credit card or a loan. Moreover, even if the approval is granted, a higher interest rate will be charged as the bank will be taking a considerable risk in approving their application. 

560 Credit Score – Here’s What It Can Get You

Credit Cards for 560 Credit Score:

Most banks and financial institutions in the UAE generally avoid approving requests for new credit cards with such a credit score due to the risk of failure in repayment of the bills on the applicant’s card. However, some financial institutions may provide secured credit cards in such cases. Here, the applicant will be required to pay a specific amount as security before using the credit card. 

Personal Loan for 560 Credit Score:

With a 560 credit score, you can get a few options for a personal loan in UAE, although the interest could be higher than that at which the loan is provided to high-score individuals. Moreover, the loan amount sanctioned can also depend on the credit score, with such a low score generally leading to low amounts with a 560 credit score personal loan. 

Home Loans for 560 Credit Score:

Home loans are generally the most difficult loans to get with a bad credit score due to the large amounts and long repayment tenures involved. In case, a bank still approves your loan application, you can expect higher interest rates, lower loan amounts, and shorter repayment tenures. Additionally, you may also be required to keep one of your properties as collateral. 

Auto Loans for 560 Credit Score:

Similar to other loan plans, having a bad credit score might cause several hindrances with such a low score. To balance the risk of approving the application of an individual with such a low credit score, financial institutions may offer car financing only at higher rates (along with collateral, if necessary). 

Insurance Plans with 560 Credit Score:

Compared to loans and credit cards, the impact of credit score is less with respect to insurance policies. Nevertheless, insurance providers still check your credit score before deciding your premium and other terms of the policy. Individuals with a 560 credit score may generally be required to pay higher premiums. 

Tips to Improve Your 560 Credit Score

Individuals with poor credit scores can take the below-mentioned points into consideration to boost their credit scores - 

Timely Bill Payments:

All your bill payment history will be considered for the calculation of your credit score. Consequently, to improve your score, it is essential to pay off all your bills (including the credit card bills) by the due date.  

Regular Loan Repayments:

Similar to bills, it is highly recommended to complete your monthly instalment payments on time If you are in debt. Paying off loans promptly demonstrates proper financial management on your part, which can lead to an increase in your credit score.  

Avoiding Multiple Credit Card and Loan Applications:

It must always be kept in mind to avoid multiple sending applications for loans or credit cards in a short period. Generally, the more frequently you perform this action, the more it (negatively) affects your credit score. Thus, even if there is an emergency, you must avoid applying for multiple loans or credit cards in order to maintain your score.  

Clearing Out Previous Bill Payments:

Failure in clearing your dues can negatively impact your credit score. Thus, if there are any pending dues, you must clear them promptly to improve your credit score. 

Analysing Your Credit Report:

Keeping a constant check on your credit score can have a bad influence on your credit score. While monitoring your score at a reasonable frequency is good, checking it excessively can lead to a drastic reduction in your score. Consequently, you should restrict yourself from verifying your credit score excessively. 

How to Check Your Credit Score for Free?

In the UAE, the Al Etihad Credit Bureau checks and provides credit scores to applicants. However, whether you wish to get a detailed credit report or just your credit score, you will need to pay a fee to the AECB. 

To check your credit score for free in UAE, you can always visit policybazaar.ae and check your score in just a few simple steps. Under the ‘Credit Card’ drop-down menu, you can select the ‘Credit Score’ option. Once you are on the page, you can provide a few personal details in the form present here and get your credit score for free!

Key Takeaways

Possessing a 560 credit score can cause uncertainties in terms of availing of loans and credit cards. Whether it is a mortgage loan or a 560 credit score personal loan, there are high chances that your application will be rejected or approved only at significantly higher interest rates. For this reason, banks always recommend maintaining a good or at least an average credit score. Improving upon a 560 credit score is easy, as you can be punctual with the repayment of your credit card bills and loan instalments, clear out previous debts, avoid applying for multiple cards or loans at once, and check your score only at specific intervals to do the same.  

To check your credit score for free, you can continue on policybazaar.ae and visit the ‘Credit Score’ section under the ‘Credit Cards’ category to proceed.

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