Build Your Credit

How To Build Your Credit As a Starter in UAE

How To Build Your Credit As a Starter in UAE

UAE is one of the most favored countries for Expatriates. Once you arrive, you have ample opportunities as well as responsibilities along your side. As a starter, if you start building up your credit score from this point, it will be an excellent support system for you in times of financial need.

Most of the banks in UAE expect you to have a credit score to prove your creditworthiness, before lending. This is applicable for both, personal loans or credit cards. Now, the question is, until you have borrowed, how will you maintain a credit score? There are a few banks that help you with a loan or card if you have no credit score i.e. if you are borrowing for the first time. The credit card limit or personal loan amount may not be very high, but this helps you build a credit score as a starter in Dubai.

How to start?

By getting a credit card or personal loan in UAE.

How to build a Credit Score using credit card

  • Apply for a credit card with banks. In case your applications do not get approved due to ‘no credit score’, you may apply for a secured credit card by depositing a certain amount against the credit limit extended to you on approval. This later gets refunded or adjusted.
  • Opt for a card with a low credit limit. This is convenient as well as easily approved.
  • Make sure you make do all payments on time. This is what will build your credit score.
  • You may get calls from various banks for your approved credit card but opt for just one to start with.
  • Be wise in choosing your credit limit (if asked for by the bank) and borrow an amount that you can afford to pay comfortably.
  • Pay your full dues every month. Do not just pay minimum due. Avoid paying interest charges on your credit as it may not reflect positive in your credit report.

How to build a Credit Score using Personal Loan

You may also route through personal loan for building a credit score.

  • Apply for a personal loan, once approved; keep repaying the installments on time. Do not miss any payment.
  • If not personal loan, it can also be a mortgage, a car loan, or a secured personal loan.

Key Notes:

  • Make your payments on time, even if it is just the minimum amount that you can afford to pay. Late payments can wreck your credit reports for years.
  • Restrict your credit utilization rate to 30% of the assigned total credit limit to you. This would improve the overall health of your credit in the long run.

Published by : Gulf Finance Team

Published on : 18th June 2020

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