What Does a 580 Credit Score Mean?

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A credit score, as one may be aware, indicates an individual’s credit history and general financial record. For this reason, this score is widely utilised by banks and institutions alike when examining an application regarding a loan, credit card, or any other product. Each category of credit score has different implications for the individual, with the 580 score being no exception.

This article will discuss credit scores in the UAE and answer the question “Is 580 a good credit score”? As you keep reading, you will also find out the prospects of an individual with a 580 credit score in UAE with respect to obtaining a credit card or a loan.

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Understanding a 580 Credit Score 

As mentioned earlier, a credit score is considered an essential aspect of the approval of loans and credit cards. In the UAE, credit scores span between the lower and upper ends of 300 and 900. As per the categorisations followed by most institutions, 580 would be considered a low credit score. Thus, an individual with a credit score of 580 will mostly have a poor credit history. 

Generally, banks and financial institutions tend to avoid granting loans and credit cards to individuals with such low credit scores. At the same time, one may still find a couple of options with such a score albeit at higher interest rates and fees.

What Can a 580 Credit Score Get You?

Credit cards for 580 credit score:

Getting a credit card with such a low score may prove quite challenging, as financial institutions mostly often deny applications owing to the risk involved. In such a circumstance, banks provide secured credit cards where you will be liable to pay a certain amount in the form of security. 

While this may appear unfavourable initially, an individual with a 580 credit score may still go with this option. If the bank observes you maintaining a good record, it may also convert your secured credit card into an unsecured one like the regular cards. 

Personal Loan for 580 Credit Score:

Banks usually don’t accept requests for personal loans with a low credit score. However, the status of your application will also depend on the amount that you wish to borrow. Moreover, some banks may provide you with a loan while charging a higher rate of interest to avoid any risk. 

Homes Loans for 580 Credit Score:

When it comes to mortgage loans, financial institutions are often reluctant to offer loans to individuals with a 580 credit score as it reflects that they may not possess the adequate financial skills to manage their loans and credits. 

Moreover, even if some banks provide you with a loan, they include a higher interest rate along with collateral. With the loan amount naturally being higher in home loans, getting a plan with higher interest rates could often prove perilous. 

Auto Loans with a 580 Credit Score:

It might be difficult to get an auto loan with such a low credit score. However, while the chances are quite low, the bank may approve your application at higher rates as your car ultimately serves as collateral for the auto loan. 

Insurance Plans with 580 Credit Score:

Compared to loans and credit cards, the impact of credit scores is less when it comes to insurance. Nevertheless, this score is utilised by insurance providers to estimate whether you would be able to pay the premiums on time. With a credit score of 580, you may end up paying higher premiums compared to the regular premium prices. 

Tips to Improve Your 580 Credit Score 

Individuals with low or poor credit scores must enhance their credit scores in order to be eligible for loans and new credit cards in the UAE. If you have a 580 credit score, you can go through the following points to find out how to boost your credit score efficiently -

Improve Your Bill Payment Record:

Not paying off bills on time can adversely affect your credit score. Whether it is your credit card bill or utility bills, you must make sure to pay them by the due date to improve your credit score over time.  

Loan Repayment:

In case you already have a loan, it is advisable to pay all the monthly instalments on time to avoid affecting your credit score. By punctually repaying all the instalments, one can demonstrate their financial management, which leads to an increase in the credit score. 

Limiting Loan and Credit Card Applications:

If your application for a loan or credit card is rejected, you may think that re-sending the applications or applying for any other product immediately will result in approval. However, instead of approval, such reckless applications result in a reduction of your credit score. 

Each application that you make for any financial product is included in the credit report (as well as its approval or rejection). Thus, you must first improve your credit score and other financial fundamentals before applying for the same financial product again. 

Frequently Checking Credit Score:

While checking your credit score on a regular basis is recommended, checking it excessively can quickly bring your score down. Thus, even if your credit score is low, it is recommended to first work on it and make improvements concerning loans and repayment before checking again. 

Opening Multiple Bank Accounts:

Managing multiple bank accounts doesn’t affect your credit score if you maintain them well. However, if you open multiple accounts in a short period and fail to manage them properly, your score can be negatively impacted. Thus, it is recommended to avoid opening more than one bank account in a short span.

 How to Check Your Credit Score for Free?

The al etihad credit bureau (AECB) is responsible for providing credit scores to all the residents of the UAE (both nationals and ex-pats). Individuals and companies are required to fill out a form and make a payment to obtain their credit score from the AECB. 

However, with policybazaar.ae, you can check your credit score for free. You can simply visit our website and go to the ‘Credit Score’ section under the header ‘Credit Cards’. Here, you can provide a few relevant details and seek credit score information – all without any fees or charges!

Key Takeaways

The question of whether a credit score of 580 is good in UAE or not appears often. Generally, a credit score of 580 is considered low as per the norms in the country. Such a credit score can make it difficult for individuals to have their loan or credit card applications approved. However, while the number of options is limited, such individuals can still get their preferred financial product from some of the providers (albeit at higher rates and fees).

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