When you’re borrowing money from a financial institution, expect the bank or lending entity to check your creditworthiness or your ability to repay a loan. In the United Arab Emirates (UAE), a credit score and report will provide a snapshot of your financial history and behavior. Keep reading to learn how to check your credit score in the UAE.
What is a credit score?
In the UAE, a credit score is a three-digit number between 300 and 900, as given by the Al Etihad Credit Bureau (AECB), the government entity mandated to collect credit information from financial and non-financial institutions in the UAE. It gauges the creditworthiness of an individual, establishment or company. Essentially, the higher your score, the lower your risk of missing payments.
Having a good credit score comes with many advantages. Apart from easier loan approvals, you may even get lower interest rates on credit cards and loans. This will help you save money over time. Moreover, you may enjoy better credit card rewards and benefits.
If you’re an establishment or a company, a good credit score will help you establish your credibility among potential investors, partners and suppliers.
How AECB computes your credit score
AECB computes your score using over 2,000 data points from several sources, ranging from banks and financial institutions to telecom companies. It uses an algorithm to predict your likelihood of missing payments in the next 12 months.
Below is a breakdown of your credit score.
Bill payment history: 35 percent
This simply demonstrates how timely you are with your payments. Since it has the highest percentage among other credit score components, being unable to pay your bills on time can substantially lower your score.
Debt level: 30 percent
This refers to how much of your credit card and loan limits you’re using. Using up to your credit limit too often can lower your credit score.
Age of credit history: 15 percent
The credit history age is how long you’ve been using credit products, such as credit cards and bank accounts. It’s calculated by looking at the age of all your credit accounts combined.
Total credit inquiries: 10 percent
Soft credit inquiries (i.e., when you or an authorized entity checks your credit report) typically don’t hurt your score. The big impact comes from hard inquiries. These happen when you apply for credit, and the lender reviews your credit report.
Type or mix of credit account: 10 percent
There are two main types of credit accounts in the country: installment loans and revolving credit. Installment loans have fixed payments and a maturity date or tenure by which you need to repay the loan. On the other hand, revolving credit (like credit cards) gives you a credit limit without a maturity date. Managing both types of credit well over time is beneficial for a strong credit score.
Understanding your credit report
Note that your credit score is just one aspect of your credit report.
This document summarizes your credit and payment history in the UAE, giving an overview of your financial behavior. The report typically includes information on your overdue payments, current and past credit facilities, bounced checks and defaulted payments. It also contains your personal information.
The report not only highlights areas where you may have financial weaknesses, such as late payments or high levels of debt. More importantly, it also shows your strengths, like a history of timely payments or the successful management of credit accounts.
Familiarizing yourself with all these will help you boost your financial health.
Read: How to get a home loan in Dubai
How to check your credit score and report in the UAE?
The AECB issues the credit score. If you want to check your credit score, here’s a quick step-by-step guide.
Step 1: Visit the website or download the app
Your first option is to visit the AECB website. An alternative is to download the app. Either method you choose, you must log in (or register) first using your Emirates ID.
Step 2: Request your credit score
Once logged in, choose “Credit Score.”
Step 3: Pay and get your score
Proceed with the payment and get your score. The payment fee for a credit score is AED10.5. This applies whether you’re an individual, an establishment or a company.
If you want to have a copy of your credit report — which includes your credit score — you can also do so. For individuals, it’s accessible via the website or app but at a higher fee: AED84. Companies may request theirs via this form, for a fee of AED157.50.
Alternatively, you can also visit an AECB branch and personally request your credit score or report. You will need to have a copy of your passport, your Emirates ID and a valid email address. While fees may vary, they are generally higher than online application fees.
Tips to improve your credit score
It’s not just important to know how to get your credit score in the UAE (and elsewhere). You must also know how to improve it.
There are several factors that can affect your credit score. For instance, incurring late payments beyond 30 days can substantially lower it. Co-signing for relatives with poor credit can also negatively impact your score.
To boost your creditworthiness, here are some tips to follow.
- Only borrow what you can afford to repay. Doing so will help you make your payments on time. This is a crucial step for building your credit history.
- Settle your payables promptly. Consistently paying your loans, credit card bills and utilities can improve your score. Pro tip: Set up automatic payments to avoid missing deadlines. Also, when repaying debts, prioritize high-interest ones.
- Maintain optimal credit utilization. The recommended ratio is under 30 percent. This means that you should aim to use no more than 30 percent of your total available credit across all your credit cards and revolving credit lines.
- Avoid applying for loans in succession. When you apply for several loans and/or credit cards within a short timeframe, you may find it hard to repay all your outstanding loans and bills.
- Regularly monitor your credit report. Be vigilant and ensure the accuracy of your report. You can address discrepancies via the AECB’s data correction request form.
Frequently asked questions
How can I obtain my credit score in the UAE?
Visit the AECB website or download their app, and log in or register using your Emirates ID.
How much does obtaining a credit score in the UAE cost?
The fee for obtaining a credit score is AED10.5 for individuals, establishments or companies.
Can I get my full credit report along with the credit score?
Yes, you can request a full credit report, which includes your credit score. It’s worth AED84 for individuals and establishments and AED157.50 for companies.
Why is having a good credit score important in the UAE?
A good credit score can qualify you for lower interest rates on loans and credit cards and better credit card rewards. It may also improve your chances with potential employers or business partners by demonstrating financial responsibility.
Final thoughts
Before you can improve your financial health and success, you must know where you currently stand. Learning how to check your credit score helps. In the UAE, the AECB generates this score and your credit report.
Regularly checking your score and report can help you maintain or improve your creditworthiness. Be mindful of how you apply for loans and ensure that you pay on time. Boosting your score opens doors to better financial products and rates and establishes your reputation as a reliable borrower.
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