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Credit Score in UAE: All you need to know about eligibility checks for loans, credit cards

 

DUBAI – Ever wondered how you get approved for a credit card or loan application in the UAE? Well, banks check your Credit Score.

What is a Credit Score? Banks and lending institutions use it an eligibility check as part of banks’ approval criteria for people applying for credit cards or loans.

The Credit Score is supplied by the Al Etihad Credit Bureau (AECB). Knowing your Credit Score will help banks decide on your loan application faster.

The AECB Credit Score is a three-digit number that indicates how likely customers are to make their payment obligations on time based on past payment behaviors, which in essence identifies an individual’s creditworthiness.

AECB calculates the Credit Score using information it regularly collects from financial and non-financial institutions in the UAE. The AECB Credit Scores range between 300-900, with a higher score meaning a lower level of risk.

For instance, if a customer’s score is 300, it means they are defaulting on a payment such as a mobile phone bill, a loan installment or even a credit card payment.

On the other hand, a good and high AECB credit score (657 or above is considered low risk, or 4 out of five stars), means that a customer’s credit behavior reflects a lower risk – which translates into easier availability of credit cards and faster loan approvals.

Customer behavior towards their payment obligations is the main contributor in calculating the AECB Credit Score.

To improve Credit Scores and Reports, make payments on time, avoid bounced cheques, reduce unnecessary debt, and reduce outstanding balances on credit cards.

“We advise maintaining a good credit history, which will avoid a higher rate of interest/credit refusals from the lenders and let customers avail other benefits,” said Neeraj Gupta, CEO of Policybazaar UAE, which is integrating with AECB to offer digital access to AECB Credit Scores on the Policybazaar.ae platform. ICA/Expat Media


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