The cost of living in the UAE is high and it’s even more expensive if you have bad credit. If your credit score isn’t great, a lot of things can be off-limits to you. You might have to pay a lot more for renting an apartment, buying a car or taking out a loan. This article will explain how your credit score works, how you can check your score, how to improve your credit score in UAE or how get a new one if yours is not so good. Read on to find out what sort of impact your credit score has on your finances, and how improving it could unlock so many other things that are currently out of reach.
What is a Credit Score?
A credit score is a three-digit number that estimates your likelihood of repaying a loan. Credit scores are used by banks, landlords, insurance providers, utility companies, and employers to determine whether to offer you a loan, where to send your mail, or what insurance premium you’ll have to pay. A bad credit score can make it harder to get a loan and can also put you at a disadvantage when it comes to renting a place to live or getting a job. If you have a good credit score, you’ll have access to more affordable loans, and you may even get a discount on your insurance. If you have a bad score, you might have to pay a higher interest rate on a loan or get a smaller deposit when renting a place to live.
How Does Your Credit Score Affect You?
Bad credit can make it harder to get a loan, or, at the very least, make it more expensive. You’re also more likely to get less favorable terms on a loan, like a higher interest rate or a smaller deposit. In extreme cases, credit problems can prevent you from getting a job or renting an apartment. If you have bad credit, you’ll probably have to pay a higher amount for utilities like water, electricity, internet and cable. Bad credit can also make it harder to get new cell phone service, insurance, and even a job at times.
How to Check Your Credit Score in UAE
You may have heard that you have a “credit score” as if it was one score that applies to all your credit accounts. However, each credit account has its own “credit score.” So even though they all have the same name, they are very different things. You can check your credit score for free, often online at websites such as Credit Karma and Credit Sesame. A credit score is a way for lenders to figure out your risk as a customer, and it’s really important to understand your credit score. There are 3 main Credit Bureaus in the United States where your data is sent and stored. These are Experian, Equifax, and TransUnion. Your data is stored in all 3 places, but the data from one bureau cannot be seen by another.
Things that Can Lower Your Credit Score
There are all sorts of things that can lower your credit score. If you fall behind on payments, that’s the biggest factor. But there are also other things that can hurt your score. Because different lenders use different scoring models, you can’t be certain which factors are hurting your credit score. That’s why you should always check your score periodically. You can get your 3 free credit scores from Credit Sesame, Credit Karma or Credit.com. You can also receive free monthly credit reports from the 3 major credit bureaus (Equifax, Experian and TransUnion).
3 Tips to Help Improve Your Credit Score in UAE
– Pay Your Bills on Time- This is the most important factor in your credit score. If you fall behind on a payment, it can make a huge dent in your score. – Keep Your Debt-to-Income Ratio Low- In addition to the payment history, your credit score will also take into account your credit utilization ratio. This is the percentage of credit that you use compared to the amount of money you make per year. If you use a lot of debt, it can lower your credit score. – Get a Credit Card- While you should be careful not to go overboard, having a credit card can be helpful when trying to build credit. If you’re responsible with it, you can use it to make purchases to build a credit history.
How to Improve Credit Score in UAE: Conclusion
Your credit score affects so much in your life so it is important to understand what it is and how it works. The best way to improve your credit score is to pay your bills on time, don’t overspend, and apply for credit only when you need it. If your credit score is not where you’d like it to be, taking steps to improve it now can help you achieve your financial goals. Bad credit can make it harder to get a loan, or, at the very least, make it more expensive. You’re also more likely to get less favorable terms on a loan, like a higher interest rate or a smaller deposit. In extreme cases, credit problems can prevent you from getting a job or renting an apartment.
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