UAE Credit Score Explained: Range, Requirements, and How to Improve It
In the UAE, your credit score is more than just a number—it’s the foundation of your financial credibility. Managed by the Al Etihad Credit Bureau (AECB UAE), this three-digit score ranges from 300 to 900 and is used by banks, lenders, and even telecom providers to assess your creditworthiness.
Whether you’re applying for a loan, credit card, or mortgage, understanding your UAE credit score is essential. This guide explains the UAE credit score range, what affects your AECB score, how to check it, and practical ways to improve it.
What is a UAE Credit Score?
A credit score in UAE is a three-digit number ranging from 300 to 900. This score is calculated by AECB, and if you have a higher score, it shows your trustworthiness in timely loan repayment and meeting other financial commitments. Generally, a score above 700 is considered good, and as it shows you’re more likely to fulfil commitments made to lenders, this increases your chances of loan approval with better terms.
Banking and finance service providers in the Emirates use this score to assess an applicant’s ability to repay the loan. You can check this score on the official AECB website or on the TAMM portal. Not only does a higher credit rating help you get loan approval more easily, but it also increases the chances of securing favorable interest rates. However, a low score only leads to rejections.
The Authority Behind Credit Score in UAE
As mentioned above, the authority behind the UAE credit score is AECB. This federal entity is fully owned by the Emirati government and is responsible for calculating credit scores. From collecting and providing credit information through several sources to generating reports with all the details, this authority scores or provides credit ratings to individuals and companies in the country. It collects the necessary details from banks, telecom companies, and other resources, and after analyzing them, creates a single report.
While some banks operating in the country only share their customers’ data occasionally, others, like Union National Bank, provide updates on a daily basis. The reports provided by the authority contain personal identity information, details about credit cards and loans, and a detailed record of payment history. Moreover, details regarding any cheque that has bounced and information on court-ordered payments are included in the report. Not only does this report have information on current loans, but it also shows past loans and their application status details, like whether they are approved or rejected.
What is a Good UAE Credit Score?
Before understanding the factors that influence the AECB credit score, let’s first learn what a good credit score is and its impact on your financial health. As we discussed above, this ranges from 300 to 900, and if you have a higher score, your chances of securing a loan approval increase. Anyone having a credit score above 700 is considered good, and it shows your reliability to the borrower.
If you have a score between 300 and 540, the lender will disapprove your request or might lend you money at a very high risk. Moreover, scores between 541 and 650 and 651 and 710 are considered bad and fair risk, respectively. Generally, anyone with a score of 711-745 is considered a reliable borrower; however, with a score between 746 and 900, your profile can secure a place under the excellent or very low risk category.
How is the UAE Credit Score Calculated?
Are you paying your bills late or defaulting on loans? You’re damaging your credit rating, which can cause irreparable financial damage. You must already be aware that the factors that are used to calculate this score differ in each country. However, for Emirati residents, it’s calculated based on the following factors:
1. Bill Payment History
If you’re living in the Emirates and have not paid any bill before its due date, it has already affected your credit score negatively. Paying bills on time is one of the major factors used by AECB to calculate this score. You must understand the importance of clearing your bills on time, as the payment history accounts for 35% of the AECB credit score.
2. Effect of Credit Card Balances
The level of debt shows the balance you need to repay on your credit cards. In simple words, it is the difference between your card limit and the amount you have spent. If you regularly spend more than the maximum credit card limit, it negatively affects your AECB credit score, as this factor makes up nearly 30% of your score. If you want to improve credit score UAE, you need to understand that a good bill payment history and low debt level are the two most important points to focus on.
3. How Long You’ve Had Credit
Another factor that is used to calculate UAE credit score is the credit history age, which shows how long you have been using credit, like credit cards or loans. Generally, the average age of all your accounts and your oldest account is considered. This factor is important, as it makes up nearly 15% of your total credit score. If you’ve managed a good credit score for a long time, your score will be higher.
4. Types of Credit Accounts
You might be aware that the kinds of credit accounts you have also matter for your credit score calculation. If you have managed your accounts well, it will help you secure a higher score. This factor contributes to nearly 10% of your total score. In addition to this, your age, nationality, and overall financial activity also play a significant role in credit score calculation.
5. Credit Applications
If you have applied for multiple loans and credit cards in a short period, it negatively affects your credit score. As each credit application creates a hard inquiry, it shows lenders that you’re not reliable and might not fulfill your responsibilities as a trusted borrower. So, you should only apply for loans or credit cards when necessary.
6. Credit Report Accuracy
If any wrong information is found on your credit report, your chances of getting a good credit score can be reduced. From inaccurate balances to information about accounts that don’t belong to you, any error can negatively affect your AECB credit score. To avoid this mistake, you should regularly check your credit report, and if you find any inaccurate details, you should contact your bank or directly report it on the authority’s official site.
How to Improve Credit Score UAE
Now that we have learned the factors affecting the calculation of your credit score, next we need to discuss the ways to improve it. Here are some useful tips to secure a good UAE credit score:
1. Check Your Report
As we discussed above, you must regularly review your credit report from AECB. If you find any incorrect information, you must not ignore it. The incorrect details on the report can lead to serious problems, so you should report it immediately to the authorities.
2. Pay Bills on Time
Payment history is the main factor in credit score calculation, so make sure you make all bill payments and loan EMIs timely. You can schedule alerts to ensure you never miss the deadlines to pay loans or utility bills.
3. Limit New Applications
You should only apply for a new credit card when you really need it, as requesting several in a brief time is considered a sign of financial instability.
4. Manage Credit Cards Wisely
Among the effective credit score-improving tips, managing credit cards wisely is important. If you have an old account with well-maintained credits, you should not close it, as a longer credit history positively affects the credit score. You must try to always use less than 30% of your total available credit limit.
Take Control of Your UAE Credit Score with Hisab Taskmaster
Maintaining a good UAE credit score shows your reliability as a borrower. You need to understand the factors that can negatively affect this score and implement tips to achieve financial stability. You can get your credit report and check your score from the official site of AECB or through the TAMM portal. However, it might be difficult to monitor your credit.
With HISAB Taskmaster CA Advisors, you can get expert support to manage a good AECB credit score. Our professionals have in-depth knowledge of factors that affect credit rating, and can help you by providing reliable solutions. From monitoring your report to identifying areas to improve, we can help you with everything needed to make better financial decisions and improve your credit score.
