Your chance of getting UAE bank loan, credit card will depend on this new credit score

June 20, 2024

By Expat Media

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UAE credit bureau to rate 90% of residents, companies

DUBAI – More than 90 percent of 13 million individuals and companies in the UAE’s Al Etihad Credit Bureau (AECB) registry will be scored under a new credit rating. Their chances of getting a bank loan or credit card in the UAE will depend on this new credit score. According to AECB, the updated Credit Score calculation allows a broader number of individuals and companies to build a credit history in the country, and includes customers without bank borrowing history. "Financial organisations and other institutions rely on AECB's data to make informed decisions regarding their customers," explained Marwan Lutfi, Chief Executive Officer of AECB. "Previously, approximately 30 percent of the individuals and companies listed in the AECB credit registry were non-scorable due to a lack of borrowing history. While credit information was always traditionally linked to banking obligations, individuals and companies unknowingly start building their credit history when making payments to non-banking institutions. Therefore, AECB improved its credit scoring models to use alternative data to compute credit scores for those with no banking credit history," Lufti said. The alternative data introduced in the Credit Score calculation uses monthly salary history, cheque clearance history, telecommunications monthly bill payment history, and water and electricity monthly bill payment history to generate a credit score. As a result, a broader number of individuals and companies in the UAE will now automatically have a credit history as and when the data is provided to AECB by the respective institutions. Many companies and individuals who purchase Credit Reports through AECB's website, mobile app or customer centres will now see a credit score appear in these reports. AECB is the sole entity responsible for maintaining a credit registry that it uses to generate multiple products such as credit reports and scores. The AECB Credit Score is a three-digit number ranging from 300 to 900 that predicts how likely a user is to miss a payment obligation in the next 12 months. A low score indicates a higher risk, whereas a higher score indicates a lower risk. ICA/Expat Media