What Does a 595 Credit Score Mean?

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Your credit score is a part of the rating system used to assess your creditworthiness. The credit score range in the UAE is between 300-900, with higher scores indicating better creditworthiness and chances of obtaining credit.

Credit scores serve an essential purpose in the UAE, as they are used by banks and other lending institutions, employers, insurance companies, and even landlords to evaluate the financial risks and responsibilities of extending their services to individuals.

Additionally, credit scores can even influence the interest rates and terms offered to individuals on loans and credit cards.

What Does a 595 Credit Score Mean? 

Generally, a credit score of 700 or higher is considered a good credit score in the Emirates, with scores above 700 being regarded as excellent by banks and other lending institutions. Credit scores below 650 are generally viewed as poor. Thus, individuals with a credit score of 595 may find it challenging to obtain approval for loan and credit card applications. 

The approval of credit facilities with a 595 credit score varies from one bank to another. If a lender approves customers with lower credit scores, you may be able to secure some credit facilities. However, it’s worth mentioning that upon approval, the bank is likely to charge higher interest rates compared to customers with a better credit score.

The table mentioned below lists the general categorisation of credit scores in the UAE -

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

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Credit Cards for 595 Credit Score

Individuals who have a credit score of 595 can choose between applying for secured or unsecured credit cards.

Secured credit cards are usually easier to obtain with this score, as lending institutions typically ask for a collateral deposit equal to the card's credit limit. This deposit serves as a security measure for the bank in case the said individual fails to make timely payments — the bank can use it to cover the outstanding balance in this case.

On the other hand, while it is possible to be approved for unsecured credit cards with a score of 595, the interest rates are likely to be considerably high.

Personal Loan for 595 Credit Score

Getting a personal loan with a 595 credit score is easier compared to other credit products. This is because personal loans usually have more lenient eligibility criteria with respect to credit scores UAE.

However, the interest rates for even personal loans are likely to be on the higher side due to the increased risk associated with lending to individuals with lower credit scores. Factors such as the loan amount, loan tenure, and monthly income may also affect the approval of your personal loan application.

Homes Loans for 595 Credit Score 

When it comes to mortgage loans, banks and financial institutions usually reject loan applications from individuals with low credit scores. Due to the large loan amounts involved in home loans, it is difficult to obtain a loan with a credit score as low as 595.

In rare cases, banks may agree to offer a mortgage loan. However, they are likely to ask for collateral or impose high-interest rates and lower loan amounts. Nonetheless, it is recommended to improve your credit score to increase your chances of approval.

Auto Loans for 595 Credit Score

Getting a car loan with a 595 credit score can be moderately difficult. Lenders usually offer auto loans at higher interest rates (and lower loan amounts) for individuals with this credit score. If you're having trouble getting approved for a car loan due to a below-average credit score, it may be worthwhile to wait and improve your credit score before applying for a loan.

Additionally, you can look for banks and other lending institutions that offer car loans in exchange for collateral, which can increase your chances of loan approval and secure better loan terms.

Insurance Plans with a 595 Credit Score 

While the approval of your insurance application is usually not influenced by your credit score, insurance companies might take your credit score into account when calculating your insurance premium.

As one may expect, a credit score of 595 could result in higher premium payments. However, enhancing your score could lead to lower prices for your insurance policies.

Tips to Improve Your Credit Score

As we saw, with a low credit score of 595, it can sometimes be difficult to get approval for your credit applications. However, it’s worth remembering that credit scores are dynamic — you can consistently follow a few tips over time to enhance your credit score -

Maintain a Good History of Your Bill Payment

In the UAE, payment history plays a vital role in the calculation of your credit score. It can contribute up to 35% towards your overall score. This encompasses payments made towards credit cards, loans, mortgages, utilities, and other bills.

It's crucial to note that lending institutions examine your payment history for the past 5 years. Missed payments or bill defaults can adversely affect your credit score, making it difficult to secure credit in the future.

To avoid this, just make sure to pay all your credit and other bills on time.

Optimise Your Credit Usage

In the UAE, your credit usage makes up for 30% of your credit score. Missing out on payments, maxing out your credit limit, and having several outstanding accounts may negatively impact your credit score.

On the other hand, using your credit accurately, making timely payments, and keeping your credit utilisation ratio low can boost your credit score.

Clear Your Current Debts and Loans

Timely repayment of existing loans is essential to enhance your credit scores. It demonstrates your creditworthiness and can result in a substantial increase in your credit score. Paying off loans can establish a favourable credit history, which is another crucial factor influencing credit scores as we saw above.

Clearing loans also decreases the overall debt and enhances the debt-to-income ratio, which plays a crucial role in the approval of your credit applications. Additionally, reducing your debt can free up funds that you can utilise to pursue other financial objectives.

Avoid Frequent Credit Inquiries

It's certainly a good idea to keep track of your credit score on a regular basis. However, it may lead to negative consequences if you check it too frequently. It is advisable to check your credit score every 2-3 months or so to keep yourself updated.

Limit Your Applications for Loans and Credit Cards

It is highly recommended by experts to restrict your applications for loans and credit cards if you wish to enhance your credit score. Doing so will reduce the number of hard inquiries on your credit report. 

Hard inquiries take place when a lender checks your credit report to evaluate the lending risk associated with your profile. Multiple hard enquiries can decrease your credit score, which can make it difficult. By limiting your applications for loans and credit cards, you can minimise the number of hard inquiries and raise your credit score.

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How to Check Your Credit Score for Free?

When it comes to checking your credit score, the al etihad credit bureau generates your credit report and credit score. However, you would be required to pay a certain amount to the AECB in order to get your credit score and report.

With Policybazaar.ae, you can check your credit score range without any fee! We have collaborated with the AECB to provide you with free access to your credit score range. Here is the entire process of checking your credit score range through the digital platform of policybazaar.ae -

  • On our website homepage, tap on the ‘Banking Products’ menu.
  • Choose the ‘Check free credit score’ option.
  • Enter all the necessary details and follow the next steps as instructed.
  • Once done, your credit score range will be sent to your registered email ID.

In a Nutshell

Individuals who have a credit score of 595 may face difficulties in obtaining credit cards and loan approvals. However, by adopting good credit habits and following the above recommendations (making timely payments, wisely using credit cards, and more) one can easily enhance their credit scores with consistent effort and persistence.

If you have further questions about credit scores, you can reach out to our customer support team via phone at 04 247 2904. You can also drop an email to communication@policybazaar.ae.

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