How your credit score is determined

Acredit report is a document that includes one’s personal identity information, details of credit cards, loans and other credit facilities, along with a payment and bounced cheque history.

The information in an individual’s credit report is provided by banks, finance companies, telecom companies.

Additional information from other sources such as utilities, real estate, government and other entities will be added in the future.

The credit score is a three-digit number that ranges from 300 to 900 and measures how likely a consumer is to default within 12 months.

The credit score changes according to credit payment behaviour and total credit exposure of individuals.

An individual’s credit score could be adversely impacted if they own multiple credit cards (even if some these are unused) because the individual is exposed to a higher credit limit.

The score changes according to credit payment behaviour; a low score indicates a higher risk whereas a higher score indicates a lower risk.

“Individuals need to be mindful of their credit history. A disciplined approach to credit and payments will keep the scores high,” Marwan Ahmad Lutfi, CEO of AECB.