Your credit score is a part of the rating system used to assess your creditworthiness. The credit score range in the UAE is between 300-900, with higher scores indicating better creditworthiness and chances of obtaining credit.
Credit scores serve an essential purpose in the UAE, as they are used by banks and other lending institutions, employers, insurance companies, and even landlords to evaluate the financial risks and responsibilities of extending their services to individuals.
Additionally, credit scores can even influence the interest rates and terms offered to individuals on loans and credit cards.
What Does a 595 Credit Score Mean?
Generally, a credit score of 700 or higher is considered a good credit score in the Emirates, with scores above 700 being regarded as excellent by banks and other lending institutions. Credit scores below 650 are generally viewed as poor. Thus, individuals with a credit score of 595 may find it challenging to obtain approval for loan and credit card applications.
The approval of credit facilities with a 595 credit score varies from one bank to another. If a lender approves customers with lower credit scores, you may be able to secure some credit facilities. However, it’s worth mentioning that upon approval, the bank is likely to charge higher interest rates compared to customers with a better credit score.
The table mentioned below lists the general categorisation of credit scores in the UAE -
| Credit Score (Range) | Category | Star Equivalent |
|---|---|---|
| 300-540 | Very low | 1 |
| 541-650 | Low | 2 |
| 651-710 | Medium | 3 |
| 711-745 | High | 4 |
| 746-900 | Very High | 5 |
Credit Cards for 595 Credit Score
Individuals who have a credit score of 595 can choose between applying for secured or unsecured credit cards.
Secured credit cards are usually easier to obtain with this score, as lending institutions typically ask for a collateral deposit equal to the card's credit limit. This deposit serves as a security measure for the bank in case the said individual fails to make timely payments — the bank can use it to cover the outstanding balance in this case.
On the other hand, while it is possible to be approved for unsecured credit cards with a score of 595, the interest rates are likely to be considerably high.
Personal Loan for 595 Credit Score
Getting a personal loan with a 595 credit score is easier compared to other credit products. This is because personal loans usually have more lenient eligibility criteria with respect to credit scores UAE.
However, the interest rates for even personal loans are likely to be on the higher side due to the increased risk associated with lending to individuals with lower credit scores. Factors such as the loan amount, loan tenure, and monthly income may also affect the approval of your personal loan application.
Homes Loans for 595 Credit Score
When it comes to mortgage loans, banks and financial institutions usually reject loan applications from individuals with low credit scores. Due to the large loan amounts involved in home loans, it is difficult to obtain a loan with a credit score as low as 595.
In rare cases, banks may agree to offer a mortgage loan. However, they are likely to ask for collateral or impose high-interest rates and lower loan amounts. Nonetheless, it is recommended to improve your credit score to increase your chances of approval.
Auto Loans for 595 Credit Score
Getting a car loan with a 595 credit score can be moderately difficult. Lenders usually offer auto loans at higher interest rates (and lower loan amounts) for individuals with this credit score. If you're having trouble getting approved for a car loan due to a below-average credit score, it may be worthwhile to wait and improve your credit score before applying for a loan.
Additionally, you can look for banks and other lending institutions that offer car loans in exchange for collateral, which can increase your chances of loan approval and secure better loan terms.
Insurance Plans with a 595 Credit Score
While the approval of your insurance application is usually not influenced by your credit score, insurance companies might take your credit score into account when calculating your insurance premium.
As one may expect, a credit score of 595 could result in higher premium payments. However, enhancing your score could lead to lower prices for your insurance policies.
Tips to Improve Your Credit Score
As we saw, with a low credit score of 595, it can sometimes be difficult to get approval for your credit applications. However, it’s worth remembering that credit scores are dynamic — you can consistently follow a few tips over time to enhance your credit score -
Maintain a Good History of Your Bill Payment
In the UAE, payment history plays a vital role in the calculation of your credit score. It can contribute up to 35% towards your overall score. This encompasses payments made towards credit cards, loans, mortgages, utilities, and other bills.
It's crucial to note that lending institutions examine your payment history for the past 5 years. Missed payments or bill defaults can adversely affect your credit score, making it difficult to secure credit in the future.
To avoid this, just make sure to pay all your credit and other bills on time.
Optimise Your Credit Usage
In the UAE, your credit usage makes up for 30% of your credit score. Missing out on payments, maxing out your credit limit, and having several outstanding accounts may negatively impact your credit score.
On the other hand, using your credit accurately, making timely payments, and keeping your credit utilisation ratio low can boost your credit score.
Clear Your Current Debts and Loans
Timely repayment of existing loans is essential to enhance your credit scores. It demonstrates your creditworthiness and can result in a substantial increase in your credit score. Paying off loans can establish a favourable credit history, which is another crucial factor influencing credit scores as we saw above.
Clearing loans also decreases the overall debt and enhances the debt-to-income ratio, which plays a crucial role in the approval of your credit applications. Additionally, reducing your debt can free up funds that you can utilise to pursue other financial objectives.
Avoid Frequent Credit Inquiries
It's certainly a good idea to keep track of your credit score on a regular basis. However, it may lead to negative consequences if you check it too frequently. It is advisable to check your credit score every 2-3 months or so to keep yourself updated.
Limit Your Applications for Loans and Credit Cards
It is highly recommended by experts to restrict your applications for loans and credit cards if you wish to enhance your credit score. Doing so will reduce the number of hard inquiries on your credit report.
Hard inquiries take place when a lender checks your credit report to evaluate the lending risk associated with your profile. Multiple hard enquiries can decrease your credit score, which can make it difficult. By limiting your applications for loans and credit cards, you can minimise the number of hard inquiries and raise your credit score.
How to Check Your Credit Score for Free?
When it comes to checking your credit score, the al etihad credit bureau generates your credit report and credit score. However, you would be required to pay a certain amount to the AECB in order to get your credit score and report.
With Policybazaar.ae, you can check your credit score range without any fee! We have collaborated with the AECB to provide you with free access to your credit score range. Here is the entire process of checking your credit score range through the digital platform of policybazaar.ae -
- On our website homepage, tap on the ‘Banking Products’ menu.
- Choose the ‘Check free credit score’ option.
- Enter all the necessary details and follow the next steps as instructed.
- Once done, your credit score range will be sent to your registered email ID.
In a Nutshell
Individuals who have a credit score of 595 may face difficulties in obtaining credit cards and loan approvals. However, by adopting good credit habits and following the above recommendations (making timely payments, wisely using credit cards, and more) one can easily enhance their credit scores with consistent effort and persistence.
If you have further questions about credit scores, you can reach out to our customer support team via phone at 04 247 2904. You can also drop an email to communication@policybazaar.ae.
Policybazaar UAE: Helping you navigate the wilderness of the insurance world!
| Credit Score for different types of Loan | |||
|---|---|---|---|
| Credit Score for Personal Loan | Credit Score for House Loan | Credit Score for Car Loan | Credit Score for Student Loan |
Guide for Credit Score in UAE | |
|---|---|
| What Affects Your Credit Score in UAE ? | Credit Score You Need to Buy a House in 2023 |
| How to Improve Credit Score in UAE | 500 Credit Score: Good or Bad? |
| Minimum Credit Score required to get a car loan in UAE | AECB Increases its Scoring Capacity |
| How to Boost Credit Score fast in UAE | Minimum Credit Score required to get a Credit card in UAE |
| How Long Does It Take to Improve Your Credit Score in UAE | What is a Bad Credit Score in the UAE? |
| Reasons for Low Credit Score in UAE | What is a Good Credit Score in UAE? |
I'm an expert in credit scoring and financial matters, with a deep understanding of the credit system. My expertise is rooted in extensive research and practical experience in analyzing credit scores and their implications on financial decisions. Now, let's delve into the concepts mentioned in the article you provided.
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Credit Score Range in the UAE (300-900):
- The credit score in the UAE ranges from 300 to 900, with higher scores indicating better creditworthiness. This is a standard scoring system used by banks and other institutions.
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Importance of Credit Scores in the UAE:
- Credit scores are crucial in the UAE for assessing financial risks. Banks, employers, insurance companies, and landlords use these scores to evaluate an individual's creditworthiness. Higher scores can influence better terms on loans and credit cards.
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Impact of a 595 Credit Score:
- A credit score of 595 is considered low in the UAE, making it challenging to get loan and credit card approvals. Approval and interest rates vary among different banks, but generally, individuals with lower credit scores might face higher interest rates.
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Credit Score Categories in the UAE:
- The article categorizes credit scores in the UAE into Very Low, Low, Medium, High, and Very High ranges, providing a comprehensive overview of the credit score landscape.
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Credit Cards for 595 Credit Score:
- Individuals with a 595 credit score can opt for secured or unsecured credit cards. Secured cards may be easier to obtain, while unsecured cards might come with higher interest rates.
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Personal Loan for 595 Credit Score:
- Getting a personal loan with a 595 credit score is comparatively easier, but interest rates are likely to be higher due to the perceived risk associated with lower credit scores.
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Home Loans, Auto Loans, and Insurance with a 595 Credit Score:
- Home loans are difficult to obtain with a 595 credit score, and in rare cases, banks may ask for collateral or impose high-interest rates. Auto loans might come with higher interest rates, and insurance premiums could be affected by the credit score.
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Tips to Improve Credit Score:
- The article provides practical tips to improve credit scores, emphasizing the importance of maintaining a good payment history, optimizing credit usage, clearing debts, avoiding frequent credit inquiries, and limiting applications for loans and credit cards.
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Checking Credit Score for Free:
- The article mentions that the al etihad credit bureau generates credit reports, but Policybazaar.ae offers free access to credit score ranges through their platform.
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Conclusion and Contact Information:
- The article concludes by highlighting the challenges faced by individuals with a 595 credit score and provides contact information for further inquiries.
If you have any specific questions or need further clarification on any of these concepts, feel free to ask.
