A 672 credit score is typically categorised as "fair credit." Lenders often view scores in this range as suitable for loan approval. However, it doesn't fall into the "good" or "excellent" credit tiers. It may not qualify for the most favourable interest rates and loan terms offered by lenders. Borrowers with a 672 credit score are generally considered to have a relatively low risk of payment default.
A fair score, as the name suggests, is average. Lenders may categorise you as a subprime borrower if you have a fair score, potentially resulting in higher upfront fees and elevated interest rates on credit facilities. It could also pose challenges in obtaining approval for specific financial products, making it essential to work on improving your credit for better financial opportunities and terms.
Fair Credit Score vs Good Credit Score: Know the Difference
Having a fair credit score places you in the middle of credit score ranges. Creditworthiness improves as score rise, with good credit scores representing a step up.
As your credit improves, you become a more favourable candidate for various financial opportunities, starting with credit cards. However, the significance of strong credit extends beyond this initial benefit.
Credit Cards: A higher credit score increases your likelihood of qualifying for credit cards that match your needs, such as those with rewards programs or low APR.
Mortgages and Loans: Strong credit score facilitates eligibility for mortgages, auto loans, and more.
Interest Rates: Lenders may utilise your credit score to determine interest rates and credit limits, with a higher score often leading to better terms.
Rental Applications: Landlords may review your credit report to assess your suitability for an apartment lease.
Employment Applications: Some employers, with your consent, may access your credit reports during background checks.
Insurance Premiums: In some regions, insurers factor in your credit history when setting premiums.
Deposits: Cell Phone providers and utility companies may waive security deposits for individuals with strong credit.
Types of Credit Cards You Can Get with a 672 Credit Score
If you have fair credit, you may be eligible for unsecured credit cards, which do not require a security deposit. However, there are important factors to consider. Many unsecured cards for fair credit may come with an annual fee and a high variable APR on purchases, potentially resulting in substantial interest charges if you carry a balance.
Credit cards for a 672 credit score often have relatively low credit limits. Some issuers may increase your limit after several months of on-time payments, which is significant as it directly affects your credit utilisation rate.
Is it possible to obtain a rewards credit card with fair credit?
Securing approval for a cash back or travel rewards credit card with fair credit can be challenging. While you might find a card offering limited cash back, the most rewarding credit cards generally require good or excellent credit.
If your goal is a premium rewards card, don't lose hope. The impact of responsible habits on your credit scores can be surprising. Credit cards, even if not top-tier, can still help build credit by reporting your activity to the credit bureau. As long as you make timely payments and follow credit-building guidelines, you can position yourself for eligibility for better credit cards in the future.
Personal Loan Options with a 672 Credit Score
Even if you have a 672 credit score, you may qualify for a personal loan, but be prepared for higher interest rates and additional fees compared to those with good or excellent credit scores.
These elevated rates and fees can impact the desirability of the loan, depending on its purpose. For instance, if you intend to consolidate credit card debt using a personal loan, the new loan's interest rate might not be sufficiently low to result in long-term savings, particularly when considering upfront fees.
On the other hand, if you're seeking a personal loan for a significant purchase, it's worth considering whether it's a necessity or if you can postpone the purchase. By taking the time to build your credit, you may become eligible for a loan with a more favourable interest rate.
Factors that can negatively impact your AECB credit score
Several behaviours and actions have the potential to negatively affect your aecb credit score in the UAE. These include:
Late Payments: Any payment that is delayed by more than 30 days can harm your credit score in the UAE. Credit reporting bureaus are promptly informed about payment delays, leading to an unfavourable impact on your credit score.
Frequent Credit Applications: Each time you apply for credit, a hard credit inquiry is initiated on your account. Even if the application is not approved, these hard inquiries can still have a detrimental effect on your credit score in the UAE.
Closing Zero Balance Credit Cards: Cancelling a credit card with a zero balance can have adverse consequences for your credit score. This action reduces your total available credit, resulting in an increased credit utilisation ratio. It also shortens your credit history duration.
Ways to Improve a 672 Credit Score
Improving your credit score is a proactive process that involves responsible financial management. Here are some steps you can take to enhance your credit score:
Timely Payments: Ensure that you consistently make payments on or before their due dates. Timely payments are a fundamental factor in building and maintaining a positive credit history.
Avoid Bounced Checks: Steer clear of bounced or returned checks, as they can adversely affect your credit score. Maintaining a good check record demonstrates financial responsibility.
Simplify Your Credit: Reducing the number of credit cards and loans in your name can have a positive impact. Having too many open lines of credit can be seen as a potential risk by creditors.
Manage Balances: Work on reducing your outstanding balances and keeping your credit card utilisation low. A high credit card balance relative to your credit limit can negatively impact your credit score.
Keep Old Accounts Open: The length of your credit history is essential. Avoid closing old credit card accounts, especially if they are in good standing, as they contribute positively to your score.
A 672 credit score is typically considered "fair credit" in the UAE. Lenders often approve loans for individuals with scores in this range. Still, it may not qualify for the most favourable interest rates. Maintaining a good credit score is crucial for accessing favourable loan and credit card rates, as well as improving employment prospects.
To know more about 672 credit card, go through the following frequently asked questions section.
Ans: In the UAE, a 672 credit score is typically categorised as "fair credit." It implies that while it's generally suitable for loan approval, it may not qualify for the most favourable interest rates and loan terms offered by lenders.
Q2. What factors negatively impact my AECB credit score?
Ans: Several behaviours can negatively affect your AECB credit score, including late payments, frequent credit applications, closing zero-balance credit cards, and consolidating balances onto a single card.
Q3. How can I check my credit score through AECB?
Ans: You can conveniently access your credit score in the UAE on Policybazaar.ae. You can access your credit score for free on this third-party aggregator.
Q4. How can I improve my 672 credit score?
Ans: You can take proactive steps to improve your 672 credit score in the UAE, including making timely payments, avoiding bounced checks, simplifying your credit portfolio, managing balances effectively, and keeping old accounts open to maintain a positive credit history.