Credit Score

Credit Score
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  • Easy loan approvals
  • Credit limit Increased
  • Reduced Insurance Premiums

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What is a Credit Score?

A credit score is a number between 300 and 900 that helps banks and other lending organisations decide whether you can be trusted when you apply to borrow money. Besides credit scores, lenders also figure this out by looking at things like how well you have paid back loans before, how much money you owe, and how many new loans you have recently opened. 

The higher your credit score (closer to 900), the better you are perceived with respect to the management of credit. In the UAE, this is really important if you are seeking credit.

In the UAE, your credit score is worked out using information from different institutions like banks, government agencies, and phone companies. They focus on two main things: how well you pay back what you owe and how much credit you use compared to what you can borrow.

Remember, your credit score is not set in stone. It changes based on how you manage your money and loans over time.

How Does Credit Score in UAE Work?

Your credit score is determined using more than 2,000 data points from several financial sources such as banks, financial institutions, courts, telecom, and other utility companies. Your credit score is also established based on your existing financial habits. 

Here are the factors taken into account when calculating credit score in the UAE -

  • Length of Credit History
  • Public Records
  • Types of Accounts
  • Debt Accumulation
  • Payment History
  • Recent Credit Activity
  • Available Credit

How to Check Credit Score in UAE Online For Free?

You can check your credit score in two ways -

Via AECB (Al Etihad Credit Bureau)

To check your credit score in the UAE using the AECB mobile application -

  • Download the mobile application from the Apple App Store or Google Play Store. 
  • Scan your Emirates ID on the application.
  • Register and create a new account. 
  • Select the product as AECB credit report. 
  • Make a nominal payment of AED 84 (plus VAT) to obtain the score. 

Via Policybazaar.ae

Policybazaar.ae, in partnership with the AECB, provides you with an opportunity to access your credit score for free. You can head to the ‘credit score’ section on our website and provide a few essential details in the credit score form to check your credit score range.

Why Does Credit Score Matter?

Lenders assess your credit score to gauge the likelihood of you repaying your debts on time, i.e., the level of risk that you pose as a borrower. As a result, your credit score holds substantial influence over your loan eligibility, mortgage approval, and the credit limit extended on your card.

If your bank contacts you with an offer to elevate your credit card limit, it is indicative of a positive credit score. Conversely, a declined loan application might stem from a lower credit score. Individuals with higher scores might also secure more favourable interest rates with select lenders.

How to Improve Your Credit Score?

By reviewing your credit report, you can get insights into the factors impacting your score negatively. Once you have all the information, you can take steps to improve your credit score accordingly.

Here are the general steps to boost your credit score in the UAE - 

  • Make payments (whether for debt or utility bills) on time 
  • Avoid incidents of check bounce
  • Exercise caution with new credit applications — you can enhance your score by reducing active credit cards and loans
  • Settle as many debts as possible and avoid maxing out your credit limit
  • Address inaccuracies in your credit report — incorrect data on your report can lower your score

What is the Use of Credit Score in UAE?

The credit score within the UAE, as we saw earlier, reflects an individual's financial credibility directly. This underscores the paramount significance of your score for entities such as banks and other institutions that hinge their transactions on trust. 

Various entities utilise the credit score in the following ways:

  • Financial institutions like banks utilise it to determine loan and credit card eligibility for individuals and businesses.
  • The credit score influences decisions regarding loan amounts and credit card limits.
  • Insurance companies may refer to it while assessing applications for insurance plans, particularly for the calculation of premiums. 
  • Home rental agencies and similar organisations consider it during the rental process.
  • Unsecured loan applications are influenced by credit scores.
  • Telecom service providers may refer to credit scores when offering postpaid connections.
Credit Score for Other Types of Loan
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What Does Credit Score Range Indicate?

Tabled below are the UAE credit score ranges that you, as a borrower, must be aware of -

Credit Score Range Stars Allotted Category
746 to 900 5 Very High
711 to 745  4 High
651 to 710 3 Medium
541 to 650 2 Low
300 to 540 1 Ver Low

A General Overview of What Constitutes Credit Score 

Discussed below are the general constituents of a credit score in the UAE -

  • Payment History - Undoubtedly, the most crucial factor impacting an individual's credit score is their payment history on the credit card. This record objectively reflects timely and missed payments, as well as the recency of such occurrences.
    A higher percentage of on-time payments leads to score improvement. Delays exceeding 30 days are reported by lenders, negatively affecting the UAE credit score.
  • Credit History Duration - A positive score reflects a history of punctual payments. Credit bureau considers the average age of credit when assessing credit history.
  • Variety of Accounts - A diverse mix of accounts, including retail and credit cards, can enhance your AECB credit score.
  • Recent Credit Activity - Opening numerous accounts or applying for new ones within a short span raises scrutiny. It might indicate financial instability, reduce the age of your credit, or lead to multiple hard inquiries, all of which can potentially lower your AECB credit score.
  • Accumulated Debt - Another vital parameter here is the sum borrowed through credit card loans. This is based on the total owed amount and the ratio of owed funds to available credit in the card account.

Guide for Credit Score in UAE

What Affects Your Credit Score in UAE ? Credit Score You Need to Buy a House in 2024
How to Improve Credit Score in UAE 500 Credit Score: Good or Bad?
Minimum Credit Score required to get a car loan in UAE AECB Increases its Scoring Capacity
How to Boost Credit Score fast in UAE Minimum Credit Score required to get a Credit card in UAE
How Long Does It Take to Improve Your Credit Score in UAE What is a Bad Credit Score in the UAE?
Reasons for Low Credit Score in UAE What is a Good Credit Score in UAE?

Have a look at what people are asking about credit scores in the FAQ section next - 

Q1: Can you improve your credit score within a month?

You cannot usually improve your credit score within a month. It takes a regular and disciplinary practice of various steps such as repaying debts and bills on time, not exhausting your credit card limit, and more. 

Q2: What factors can hurt your credit score?

Factors like missed payments, having multiple credit cards and loans at once, bounced cheques, and the usage of your credit card to the entire limit can negatively impact your credit score.

Q3: What is the average credit score range?

The average credit score in the UAE ranges between 650 and 710.

Q4: What is the minimum credit score required to apply for a loan in the UAE?

The minimum credit score in the UAE to apply for a loan is usually 580. Keep in mind that different loan providers have different requirements.

Q5: What is a good credit score in the UAE?

Good credit score in the UAE typically ranges between 680 and 730. 

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