We receive a lot of questions from our clients ever since we began providing auto insurance in the UAE. Some of them are looking for the lowest auto insurance in the UAE, while others are first-time car owners or foreigners. We make an effort to respond to all questions. We recently discovered that many of our clients are curious about how their credit or credit score impacts the cost of their auto insurance. In any case, we’ll answer this query in today’s article. Let’s get going.
Let’s first talk about the various components of the credit score before responding.
CREDIT SCORE COMPONENTS
· Payment History
It’s interesting to note that even missing a payment will count against you. Pay everything by the due date, including loan payments and utility bills.
· Duration of Credit History
The majority of insurance firms examine data from the previous seven years
· Credit Type
The insurance firms will take into account any loans or credit card payments you have made.
CREDIT SCORE AND INSURANCE COMPANIES
The credit score is used by almost all insurance companies in the UAE and around the world to calculate the premium. Why? The simplest response is that they use your credit score to determine whether you are worth the risk. A low credit score indicates that you are quite prone to forget to make an insurance payment. Insurance companies are frustrated by late payments.
A person with good credit, on the other hand, will consistently pay all obligations on time, including insurance payments. Similar to how a high credit score indicates responsibility and an organised life, In other words, they drive safely and avoid risk-taking situations, even when driving. A responsible driver is highly valued in the auto insurance sector.
HOW TO IMPROVE THE CREDIT SCORE
Don’t worry if you’ve occasionally made poor decisions in the past. Why? You can raise your credit score, then. How? Read on.
· Pay Bills on Time
Pay all of your bills on time, whether they are for utilities or a phone. It will be considered a late payment even if you are only one day late. You are well aware that making late payments will harm your credit score. Pay back any debts you have obtained promptly as well.
· Don’t Use the Credit Card too Much
Avoid making unnecessary purchases with a credit card. It is preferable to only use a credit card in an emergency.
· Pay off Debts
Pay off any unpaid debts if you have any.
· Don’t Open New Credit Cards
Due to the fact that each credit card has unique advantages, most people have numerous cards. Be unlike these folks. Keep only one credit card and only use it sometimes.
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