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