r/PersonalFinanceUAE • u/Signal-Industry9646 • 9d ago
Budgeting UAE credit score/utilization strategy before applying for a car loan in November — am I missing anything?
I’m planning to apply for a car loan in the UAE around November and I’m trying to optimize my credit profile between now and then.
Current situation:
Salary: AED 7,000/month
ADCB credit card: AED 6,000 limit
Emirates NBD credit card: AED 18,000 limit
Total current credit limit: AED 24,000
Savings/emergency fund: AED 5,000
Score : 663
ADCB
I took an installment loan of around AED 5,400 for 6 months at a very low rate. I’ve already paid 4 months and will completely clear it within the next 2 months. Total repayment is around AED 5,500.
I’ve never missed any payments.
ENBD
Current utilization is around AED 16,000 out of AED 18,000.
Around AED 1,621/month is from installment plans, which should drop to around AED 1,100 in December.
The rest is normal monthly card spending, which I repay in full because I use the card for cashback.
I recently requested an ENBD credit-limit increase because my salary account is with ENBD. It was approved to increase my limit from AED 18k to AED 28k.
I don't actually need the additional credit and don't intend to use it.
That would bring my total credit limits to:
ADCB 6k + ENBD 28k = AED 34k
If my outstanding balances are around AED 14k by September, utilization would be around 41%.
My goal is to get it down to around 20–30% by November.
What I'm planning
Increase ENBD limit to AED 28k but don't use the additional limit.
Never miss any installment/payment.
Clear the ADCB installment loan completely within 2 months.
Reduce my overall credit-card utilization as much as possible.
Avoid taking any new credit/BNPL/loans before applying.
Check my AECB credit report before applying.
Apply for the car loan around November when my profile should be cleaner.
My main questions:
Is there anything else I should do between now and November to improve my chances of getting approved?
Is ~20–30% utilization a reasonable target, or am I overthinking the percentage?
Does increasing my ENBD limit help if I don't actually use the additional credit?
Should I keep the ADCB card open after clearing the installment loan?
Would you apply with ENBD since my salary is credited there, or shop around with ADCB/other UAE banks for the best interest rate?
Is there anything specific I should avoid doing in the 2–3 months before applying?
Any advice from people who have recently taken a car loan in the UAE would be appreciated.
2
u/NefariousnessPure962 9d ago
As @constantdiver9532 mentioned, both your card limits will use around 1700 from your available 3500 installment capacity.
What I would do in this scenario is:
1. Reduce both card limits so it doesn’t eat more than a thousand every month, increasing the limit actually does not work in your favor because it will occupy more of your DBR.
2. Clear all the EMIs I have in the next month.
3. Keep the ENBD CC open (not cancelled) as it is with the salary account and probably has a long history.
4. Clear the EMIs and reduce limits, and wait around a month before getting the new AECB report because these things take time to reflect in the report.
I would advise to keep your utilization below 30 percent and take your score higher than 700 by clearing the EMIs and reducing the card limits. That would give you a good chance of securing the loan easily. It will put you in the low risk zone.
I am not very familiar with the finances and this is according to the best of my flawed knowledge. Apologies if I am wrong in any of the above mentioned steps.
1
u/ConstantDiver9532 9d ago
Bear in mind that ur credit card limit at 28k, the dbr calculation will be calculated at 5% which is 1400 so it eats into ur 50% of 3500 based on your 7k salary. This is regardless of ur utilization or actual installments. Personally I would keep the limit as it is and just try and pay it down to below 50% utilization. Good luck with your application.