Banks in the United Arab Emirates receive a multitude of loan or credit card applications every single day, but not all of those applications will receive approval. There are a number of reasons why a loan or credit card application may be rejected by a financial institution, and the credit score of an applicant is the first and most important factor that will be looked at when evaluating such an application.
If the credit score is seen to be bad, then the application will be immediately rejected by any bank. A credit score can be impacted by a variety of factors such as irregular loan payments, having too many credit cards already, making repeated applications for a loan or credit card, previously skipped credit card payments, and having more than one bank account.
Not having any credit cards or loans at all does not equal a high credit score in the UAE. High credit scores can only be achieved by getting a credit card or small loan and making regular loan payments to demonstrate your reliability when it comes to paying back your debts. A low credit score will therefore have a seriously negative impact on anyone trying to get a new loan or credit card, making it vital for people to improve their score and then maintain it at an appropriate level.
The good news is that there are a number of tips that people can follow to gain an improvement on their credit score. One good tip for those with a poor credit score is to attempt to negotiate with your UAE bank by clearing at least 50% of your current credit bill or other debts. The bank can then attempt to partially clear the dues by negotiating with the AECB, thus increasing your credit score.
A positive credit report and score outcome can also be achieved just by making a number of deposits into your bank. Another good tip is to review your credit report from the AECB as it is possible that your details may simply have been updated incorrectly, and such mistakes can have a massive long-term negative impact on you. Review all the details of your AECB credit report to ensure that it has been correctly updated.
The most important thing to do for anyone with an existing loan or credit card in the UAE is to pay their bills in full and on time, which is guaranteed to improve their credit score. This applies not just to credit cards but to all forms of existing monthly payments such as auto loans, home loans and personal loans. A credit score can fall because of just one missed monthly payment. If at all possible, clearing any existing loans will also positively impact your credit report and credit score. It is also a good idea to manage any existing credit cards in your name more effectively. Use any unused credit cards and ensure that the bill is paid on time to improve your credit score.