Having a good credit score in UAE is one of the most prominent characteristics of a responsible person. A good credit history indicates that the person is in control of his/her finances and has made past payments on time without any negative remark. You can survive with bad credit, but it is not always easy and definitely not cheap. Establishing a good credit score will not only help you save money but also make your financial life much easier. If you are looking for reasons to maintain your good credit,
Low-interest rates on credit cards and loans
In terms of taking a loan, even a slight decrease in the interest rate can make a huge difference by reducing the amount to be repaid. With a good credit score, you can enjoy lower interest rates. For a score with a range of 300 -900, a credit score of 700 or above is generally considered good. People who pay timely instalments on their loans and credit card dues get extensions on limits subsequently when their credit limit gets stretched. A good credit score gives you negotiating power in terms of interest rate and loan amount when you apply for a loan.
Easy and swift approval of loans
What matters the most in swift approval of your loan is your credit score. Loan limits are dependent on income but a poor credit history might cancel out or nullify your chances of getting one irrespective of how much you are currently earning. On the other hand, with a good credit score, the chances of loan approval are higher. This is because the lenders consider you trustworthy. Be it a Personal Loan, Home Loan, or Car Loan, you may have to opt for one at some point in your life. Having a high Credit Score works in your favour by convincing lenders that you can repay the loan on time. This increases your credibility as a borrower.
It is not unusual for employers to check the credit score of a candidate. A bad credit score hints at the reckless lifestyle choices and lack of seriousness about monetary matters. It can also reflect on the chances of high debt, which might interfere with a candidate’s performance at work. So, if you are looking for a job, then besides preparing for the job interview, checking your credit score and improving it also becomes indispensable. A lower score can thrash your ambition of a dream job.
How to improve your credit score?
Now that you know the benefits of a good credit score, follow the tips mentioned below to improve your score. Here are a few tips which will help you build your credit score:
Ensure that you make your monthly payments
Your credit score can only be improved if you pay your bills on time. It is advised that you set a reminder for every month.
Review your credit reports
You can get your credit report from AECB, Check your report regularly, Make sure that you review the report thoroughly and get the errors removed.
Find out what is working in your credit score’s favour and what is working against it
Evaluate your report and find out what’s helping your credit score and what’s hurting it.
Maintain your credit utilization
Raising your credit limit can help you to maintain your credit utilization. Your credit utilization can be kept in place by paying your monthly credit card balances in full each month.
Pay more than once every month
If your income allows it, try to pay your balances every couple of weeks.
If you have a low credit score, do not worry, it is never too late to improve it and reap the benefits. We hope that this article helps you in being a step closer to your financial goals.