Know Your Credit Score

By PolicyBazaar
  | Published: 27 March 2020 | Last Updated On: 30 December 2020

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Right from childhood, we always have been judged on the basis of different scores. We have been judged on the basis of academic scores, scores in sports, and even dental scores. However, when talking about financial evaluation of an individual, these scores do not matter much in the adult life; what matters the most in this context is the credit score. 

What is a credit score? 

A credit score is a three-digit number that plays a vital role in deciding your creditworthiness. The score helps financial institutions to evaluate your capability of loan repayment. Usually, a score of 700 or more is marked as an ideal credit score for personal loan.

What does my credit score say? 

Credit Score in the UAE is provided by the Al Etihad Credit Bureau (AECB). It is calculated by analysing your credit report from various sources such as banks, telecom companies and financial institutions.  This report analyses different factors such as the number of loans you are carrying, the number of credit cards you own and how frequent you pay for the credit instalments. To calculate your credit score, AECB also keeps a track of your utilization of the credit limit, missed or late credit card payments, bounced cheques and the number of debit cards owned by you. 

Credit score ranges in between 300 to 900. Any score above 700 is considered good. It tells that you are highly creditworthy and capable of repaying your loan in time. A score that is less than 700 needs to be improved. Credit score for personal loan in the UAE should be 700 or more and if it’s below 400 the application is very likely to get rejected. 

Why do I need a good credit score? 

Banks always provide loans based on collateral. However, this happens only in case secured credit. In case of unsecured credit, as that in case of credit cards, personal loans etc. loan based on collateral could be risky. Therefore, to determine your creditworthiness, financial institutions need to check your financial background. For this, they will check your credit score. Thus, to avoid any rejection while applying for loan or credit card it’s important that you maintain a good credit score. 

A few factors that can help you maintain a good credit score are:

  1. Paying bills on time
  2. Making full payments to credit card
  3. Keeping a check on the credit utilization
  4. Managing debts and credit card accounts 

What is a commercial credit score? 

AECB not only provides the credit analysis of an individual but also for the companies in the UAE. The organization uses a company’s credit history to calculate a number that indicates the latter’s the creditworthiness. The number that is calculated is termed as Commercial Credit Score or Business Credit Score. 

How can I check my credit score? 

You may get your credit score and credit report by visiting any of the AECB centres or by logging onto website to fill the online form. Alternatively, you may also login in their mobile app through SmartPass credentials. 

The process will start with a few questions by AECB to you. Once the questions are answered they can choose your any kind of financial report they want. 

As a next step, you will need to make a payment and once the transaction is complete, your report will be mailed to you within next 30minitures. 

Companies can get their credit score by visiting any of the AECB centres. They will need to present a few documents such as a trade licence and a letter requesting for credit score signed by the business owner, manager or partner. In addition, the letter should also be signed by an authorized bank in the UAE. 

Does AECB charge any fee to provide a credit score? 

AECB levy fixed fee to provide credit reports and credit scores. The fee charged by AECB are as follows: 

  1. AED 105 for Credit Report and Credit Score
  2. AED 31.50 for Credit Score
  3. AED 84 for Credit Report
  4. AED 220 for Commercial Credit Score 

Please note that these prices are subjected to change without any prior information. 

The Bottom Line 

Next time you make any credit decision, make sure that you have a good credit score. It’s a good idea to check your credit score certain intervals so as to know your current standing. Moreover, reviewing your report can help you better understand how your decision may affect your credit in the future.