Credit Score
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Posted by Money Mall Team on 01/12/2019
Top 5 Factors that affect your Credit Score in UAE
At present, Your Credit Score has become very important in UAE, Banks decide your eligibility for loans, credit cards, and other products based on your credit score and report. Many unexpected businesses are looking to credit score and deciding what your creditworthiness is, large corporate employers are also started checking your credit history, as per recent news a Real estate companies also checking your credit score before giving an apartment on rent, There are hundreds and many factors that affect the credit score.
Meanwhile, we take look at the top 5 factors that affect your credit score.
- 1. Payment History
- 2. Credit usage
- 3. Age of credit history
- 4. Types of credit
- 5. Recent credit inquiry /applications
Payment History
Payment history is the most important part of your credit score, Globally it decides the 35% to 40% of your credit score. If you had lent some money from a lender the first question you will hear is “When you will return it”? So the longtime on-time payment will be best for your credit scores. While missing a payment could hurt them.
Serious repayment issues, like write-offs, collections, bankruptcy, repossession or foreclosure can devastate your credit score, which may also make difficult to get approved for a loan or a credit card.
Credit Usage
Credit Usage are around 30% of your credit score. This is one that can be quickly improved or hurt your score. It all depends on the debt you carry measured by the credit utilization ratio.
Credit utilization is the ratio between the total balance you borrow to the total credit limit on all your revolving accounts(credit cards). The lower the utilization ratio the better you can gain the score.
Age of Credit
Globally, the Age of Credit determines 15% to 20% of the credit ratio. The credit score considers how older is your account. The older credit age is better for a credit score.
You might be experiencing the low credit score one closing your old accounts or for opening new accounts. So it is not a bad idea to keep your old account active even if you don’t use it for a while or your score may hurt.
Types of credit
There are two major types of credits -revolving credit card accounts and installment loans. If you are having both these type of accounts it will help you improve your credit score.
This will indicate how you will manage your accounts without any fail in payments. Additionally, If you have loans on different assets like a car, home in addition to this credit card and personal loan account will boost your score. However, if you are having only one account it will not devastate your score.
Credit Inquiries
Each time you submit an application for credit check an inquiry will be placed on your credit report that may cost some points from your credit score or many inquiries will reflect badly on your credit profile If one or two inquiries will not hurt much.
More inquiries in a short span of time will cut off more points from your creditworthiness. Don’t be afraid of getting more cards. Only inquiries made within the last 12 months are important for a bank
Category : Bank News &Credit &Credit Score
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Posted by Money Mall Team on 02/03/2019
How to manage your credit score in UAE?
It is very important to manage your credit score in UAE.
Based on your credit score, banks will decide if they lend you money or not and in what rate of interest. So a good credit score will benefit you more in all financial circumstances. An impaired credit score will eventually cost your financial life to the crisis. The average of 651/900 credit score which considered as a good score the moment by UAE banks. If you don’t have this score. Don’t worry, you are not alone. Believe or not many people don’t have great credit score.
So if you want to know how to manage your credit score, here are some tips for you
- Pay bills on time
After all, the lender will look at your credit report is to know how reliable you are to pay bills on time. Based upon your past performance only they decide your future performance.
Paying your bills on time is one of the most important things you can do to improve your credit. Late payments appear on your credit report and hurt your score more than anything else. So it is better to automate your payments to ensure you never miss any.
- Keep your credit card balance low
Huge debts will hurt your financial security as well as your credit score. So it is better to have your combined credit card balances is as less as 30% of combined credit limits.
More than 30% credit utilization ratio of your credit limit can hurt your credit report and also risky even if you plan to pay off the balance when your billing statement arrives. Because the same will be reported to credit bureaus when closing your statement. Which reflects your credit score number.
- Don’t close unused credit cards but reduce the limits.
Keep your unused old cards open but reduce their credit limits. As long as you don’t have any annual charges on the cards. Because on closing the card your credit card issuer no longer sends updates to the credit bureaus that results in losing the credit history which will shorten up your average credit age and cause your credit score to drop.
- Don’t apply for too many new credit card or loan unless you need it.
Opening a new credit card can increase your credit limit but the credit inquiry may cost some of your credit score points once the credit check is done. One or two inquiries will not affect too much. But many credit inquiries can have a negative impact on your score.
Frequent and multiple recent applications may label you a credit hungry person and reduce your credit worthiness in the eyes of a credit manager.
- Keep watch on your credit report.
Check for a credit report at least once in a quarter. Because your credit report may prone to some errors. Even if you done everything right sometimes your report may have some errors like incorrect information which eventually makes your score down.
Identity theft and credit card fraud may also lead to inaccurate information on your credit report. So it is better to keep an eye on your credit report updates frequently throughout the year you can dispute the information and will be corrected right away
Category : Bank News &Credit Score
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Posted by Money Mall Team on 14/09/2018
How to Check your Credit Score in UAE?
What is my Credit Score?
Your credit score is a number between 300 to 900, calculated by AECB UAE using information from your credit history
How to check your Credit Score in UAE?
AECB office in either Dubai or Abu Dhabi will provide you Credit score while you visit, you need to provide your Emirates ID and other Identification documents along with a request form.
Can I check my credit score for free?
No, AECB charges AED 60+ VAT for every credit score check done. At present, you cant check your score or report for free in UAE.What is a Good Credit Score?
Banks & Lenders use your credit score to evaluate your credit risk – generally, the higher your credit score, the lower your risk may be to the lender. hence, the interest cost will be lower for you.As per our Survey with 5 major banks in UAE, for Personal Finance/Credit Cards Banks desire a minimum score in the range of 650* to be considered as a good credit score.
Category : Bank News &Credit Score
