Much of the credit information in the UAE is provided by the Al Etihad Credit Bureau (AECB), which collates information from other credit providers such as banks. Credit scores are from 300 to 900 wherein the higher the number the better credit position an individual has. These determinants of your credit score are payment history, the amount of outstanding balance, length of credit history and types of credit history.
- You Should Always Make Payment of Your Bills
Payment of bills on time was considered to be one of the main determinants of credit scores. Payments made after the due date or any missed payment can lower your score and such information can be reported for years. Create alerts or even set automatic payments so that you can never forget when the payment is due. Timely payments of bills prove to lenders how credit worthy one is and how capable one is in meeting his/her obligations as and when due.
- Do not carry a high balance on credit cards.
Le and Wang found that high credit card balances compared to the credit limit are credit risky to cardholders. There’s no need to mention which type of credit is better as both lines of credit are good, although it’s possible to use them wisely and be excessive with them as well. So if you have a limit of AED 10000 say try and keep a balance of not more than AED 3000. It is best to only use your credit card and then pay the bill to the company in full at the end of the month but if this cannot be done steadily try and reduce your balance until it is manageable.
- Limit New Credit Applications
Credit seekers should also be very vigilant on when to apply for new credit since applying for credit several times is also bad for the credit score since it leads to several inquiries into one’s credit file. Do not apply for many credit cards or loans in a short span. Only apply for new credit when necessary and ensure that you can manage additional credit responsibly.
- Diversify Your Credit Mix
A credit mix refers to having credit card, personal loans, instalment like mortgage, among others and it helps in increasing your credit. One underwritten credit portfolio makes it easy for the credit provider to show that they can manage the credit responsibly. But only incorporate new credit into your financial profile if this will be useful and helpful to you.
- It is also important that you have a look at your credit report frequently.
It is for this reason that you should check your credit report often in order that you may be in a position to correct the mistakes which are bringing down your score. You may receive a copy of your credit report from AECB. Try to find discrepancies that can be related to personally identifiable information, bad application date or credit inquiry that was not made by the user. These necessarily have to be reported and fixed, and do enhance the credit score.
- Help a borrower to establish a long credit history
It is an imperative factor that is used in determining your credit score known as the length of credit history. Actually it is found that it is more advantageous to maintain the older accounts even though they are not that often active. Paying off one’s credit balances lowers the average age of credit generic history in several ways. If possible, once in a while employ the older accounts so that they remain useful, though one may not incur several debts.
- Should You Require Assistance do not hesitate to Consult with a Professional
Where you are struggling to balance or get an understanding of your credit score, you can consult financial experts or credit counselling agencies. They can offer best ways suitable for your individual credit repair based on a number of factors that you may have.
Conclusion
Elevating the credit score in the UAE entails patience, right choices and knowledge of determinants that affect the score. By sticking to these tips and creating proper financial routines, one receives an excellent credit history that will lead to successful financial opportunities and stability.
