How to Increase Credit Score in UAE?

Increasing your credit score in the UAE is important for accessing better financial opportunities. Today’s article provides actionable steps to improve your creditworthiness, covering key aspects like payment history, debt management, credit utilization, and responsible credit usage. Read on!

Best Ways to Increase Credit Score in UAE

1. Pay bills on time.
2. Reduce outstanding debt.
3. Avoid applying for new credit frequently.
4. Check your credit report regularly.
5. Correct any errors on your credit report.
6. Keep credit card balances low.
7. Maintain a mix of credit types.
8. Avoid closing old credit accounts.
9. Limit the number of credit cards.
10. Use credit responsibly.

Pay Bills on Time

Want a better credit score? Paying your bills on time is key. One of the easiest ways to do this is to set up automatic payments for those regular bills like your phone, rent, and credit cards. This way, you won’t ever miss a due date.

To keep track of everything, use a calendar, reminder apps, or even a budgeting app to see when payments are scheduled. If you have debts with high interest rates, like some credit cards, focus on paying those down first. Make a plan to put more money towards those high-interest debts.

Don’t forget to check your bank statements regularly! This helps you catch any surprise charges or errors. If you’re having trouble keeping up with payments, reach out to the companies you owe money to. They might be able to work out a payment plan that you can manage.

Reduce Outstanding Debt

Getting rid of debt is great for your credit score. Why? It lowers how much of your available credit you are actually using. Think of it like this: if you have a credit card with a AED 1000 limit and you owe AED 900, that’s a high credit utilization ratio. Lenders see that as risky.

But if you pay that balance down, you’re showing you can manage credit well, and your score improves. Plus, less debt means less interest paid, freeing up money to pay your bills on time.

And, of course, it makes it less likely you’ll miss payments, which also helps your credit score. Basically, managing and reducing debt makes you look financially stable, which is exactly what lenders in UAE want to see.

Avoid applying for new credit frequently

Applying for lots of new credit cards or loans can actually hurt your credit score. Every time you apply, it creates a “hard inquiry” on your credit report. These inquiries can ding your score a little. Lenders see a bunch of inquiries in a short time as a red flag.

Also, opening new accounts makes your overall credit history look younger, which can also lower your score. So, try not to apply for new credit too often. It keeps your credit history stable and shows you’re using credit responsibly in UAE.

Check your credit report regularly

In the UAE, you can check your credit report through the Al Etihad Credit Bureau (AECB) website or their app called CreditReport. You’ll need your Emirates ID to register and request your report or score.

Another option is to visit an Al Ansari Exchange branch with your Emirates ID. Checking your report regularly helps you spot any mistakes and stay on top of your credit health.

Correct any errors on your credit report

Found a mistake on your UAE credit report? Here’s how to fix it: First, get a copy of your report from the Al Etihad Credit Bureau (AECB) website or app. Look it over carefully for anything that’s wrong.

Then, gather proof to support your claim, like payment receipts or bank statements. Next, go to the AECB website and fill out their data correction form. You’ll need to attach your Emirates ID, the credit report showing the error, and the documents you gathered. Finally, keep an eye on your request to make sure the correction is made.

Need help? Call AECB at 800-BUREAU (800-287328).

Keep credit card balances low

Keep your balances lower than 30% of your credit limit. Ideally, pay your balance off completely each month to avoid interest. If that’s tough, making several smaller payments during the month can help.

Set up spending alerts so you don’t overspend. Use a budget to track where your money’s going and focus on necessary purchases. For non-essentials, consider using cash or a debit card. And always check your statements for any unauthorized charges.

Maintain a mix of credit types

For a good credit mix, it’s helpful to have different kinds of credit, like personal loans, credit cards, and maybe a mortgage if you own a home. Don’t just rely on one type. If you’re thinking about getting new credit, choose something you don’t already have.

Make sure you’re managing all your accounts well by paying on time and keeping balances low. Check your credit report regularly to see how your credit mix looks and make changes if needed. Having a variety of credit shows you can handle different types of borrowing, which is good for your credit score in UAE.

Avoid closing old credit accounts

Don’t close those old credit card accounts! They help your credit score by showing a long history of credit use. Older accounts demonstrate responsible borrowing over time. Closing them shortens your credit history’s average length, which can hurt your score.

Plus, keeping older accounts open increases your total available credit. This can help lower your credit utilization. Both a long credit history and a low utilization ratio are important for a good credit score in the UAE.

Limit the number of credit cards

Having too many credit cards can be hard to manage. Fewer cards make it simpler to keep track of your spending and due dates, meaning you’re less likely to miss payments (which hurts your credit score).

Think about how many cards you really need and close any you don’t use. Start with cards that have high fees or offer few benefits. Focus on using just a few cards responsibly: pay on time and keep your balances low.

Use credit responsibly

• Paying your balance before the closing date of the statement lowers the reported balance, which helps your credit utilization.
• A higher limit can decrease your credit utilization without increasing your spending.
• Put subscriptions or utilities on auto-pay to build a good payment history.
• Move high-interest debt to a lower-rate card, but don’t buy anything new on that card.
• Get notified when you’re nearing your spending limit to prevent overspending.
• Use different cards regularly so all your accounts stay active.
• Call your card issuing company and ask for a lower rate, especially if you always pay on time.
• They’re expensive, with high fees and interest.
• Redeem points for practical things, not luxuries.
• Keep an eye on your score to catch any surprises early.