Learn the Significance of a 700 Credit Score

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    Credit score is a three-digit number that summarises your reputation as a borrower. A score near 300 signifies that you have been an irresponsible borrower and vice versa. The purpose of this rating is to help financial institutions gauge your capacity as a borrower.

    To put it simply, it is one of the crucial parameters that financial institutions evaluate before extending any credit. So, it is vital to learn about it before applying for any loan.

    To learn more about what a 700 credit score stands for, read on.

    What Does a 700 Credit Score Means?

    If you are wondering whether a 700 credit score is good or bad, then the answer is neither. Instead, it is more like an average credit score.

    700 credit score is considered moderate. So, it is safe to say that you are in a good position, meaning it does not need any urgent attention, but you should not be lacklustre about it.

    Now talking about the current world situation, this credit score is good enough to get you any credit you need without any hassle. However, you will not likely be in a position where you can negotiate any loan terms. But you do not have to agree to any unfavourable ones like higher interest rate, strict repayment schedule etc.

    Factors Affecting Your Credit Score Negatively

    Here are some factors that can have an adverse effect on your credit score –

    Not Paying Dues on Time

    One of the primary factors that affect credit score negatively is not paying the dues on time. This will comprise instances like current EMIs, credit card bills, etc.

    Having a Subpar Credit Utilisation Ratio

    Another reason behind a low credit score is often your credit utilisation ratio. If you keep pushing the limit of your credit card or overdraft account, this proves detrimental to your credit score in the long run.

    Now, if you are wondering, what is the reason? Well, this creates a perception of you being an irresponsible borrower.

    Applying for Multiple Loans at Once

    Another vital point on this list is that applying for multiple loans at one go can hurt your credit score. The reason is that when you submit a loan application, the financier places a confirmation request with the credit bureaus, known as hard queries. Now, each hard query lessens the credit score by a small margin, and multiple ones at once can lower it significantly.

    Not Having a Healthy Credit Mix

    Not having a diverse credit portfolio often leads to a lowering of credit score. This means, as a borrower, you should have a decent mix of secured and unsecured loans along with successful closure of each.

    Closing Old Credit Cards

    Another factor that can reduce your credit score is closing old credit cards. The reason being, these payment cards have a long transaction and repayment history and closing them will erase that from the system. Resultantly, you will lose a few points on your credit score.

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    How to Improve Your Credit Score?

    Here are some tips to improve your credit score above 700 –

    • On-time repayments
    • Keeping a low credit utilisation ratio
    • Applying for one loan at a time
    • Maintaining a diverse credit portfolio
    • Solving any inconsistencies in the credit report

    What Can You Get with a 700 Credit Score?

    Now, you may know how to get a 700 credit score, but you should also learn that you cannot increase your credit score overnight. However, your financial needs will not wait till that time.

    So, it is vital to have an understanding of what financial services you can access with this current credit score. To help you in this regard, here are a few common questions answered –

    Can You Get Credit Cards with a 700 Credit Score?

    Yes, you can easily get a credit card with a 700 credit score. However, you may end up compromising a bit on the credit limit and a few additional facilities.

    Can I Get a Personal Loan with a 700 Credit Score? 

    Yes, you can get a personal loan with this credit score. Since 700 is a low-risk credit score in the UAE, you will be eligible for a personal loan at a low rate of interest and repayment flexibility.

    Can You Get Home Loans for a 700 Credit Score?

    Definitely, you can easily get a housing credit with a credit score of 700. Moreover, financial institutions may offer you a comparatively better loan deal. But, negotiations over the loan terms may not be possible, depending on the lender.

    Can You Get an Auto Loan with a 700 Credit Score?

    Yes, you can easily get an auto loan with this credit score. Moreover, depending on your loan amount and the financier, you can negotiate the loan terms and get a better deal.

    Can You Get Insurance Plans with a 700 Credit Score?

    Yes, with this credit score, you can get an insurance policy, whether life, health or general.

    As evident from the above discussion, a 700 credit score is not a bad place to be, but with a lot of room for improvement. So, it is better to be cautious and maintain financial discipline to improve this score.

    Frequently Asked Questions

    Who calculates credit scores in the UAE?

    In UAE, Al Etihad Credit Bureau or AECB is responsible for calculating individuals' credit scores.

    Can I get a loan with a reduced interest rate if I manage to improve my credit score?

    Yes, if you can improve your credit score and take it beyond 750, you can negotiate a better loan deal.

    Is it possible to improve my credit score in a month?

    Not exactly; improving credit score is a time-consuming and continuous process. You need to be at it for months to get it up.

    Is there any easy way to get a loan with a low credit score?

    Yes, you can add a co-borrower with a high credit score to secure a loan if you have a low credit score.

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