If you’re interested in getting a personal loan, auto loan, mortgage or credit card in the UAE, a clean credit history will soon be a necessity. The newly inaugurated Al Etihad Credit Bureau (AECB) will be offering credit reports on everyone in the UAE. AECB is a federal government company that specializes in providing UAE-based credit reports and other financial information for debt that has been incurred in the UAE only.
By setting up AECB, the federal government’s objective is to support and develop both the UAE’s financial and regulatory infrastructure. By collecting individual customer histories from all UAE banks, AECB will compile all of this key information into a relevant credit report. Companies and individuals can then use these reports to gauge whether a person is high or low risk.
For individuals, credit reports are important because banks will have access to the individual’s payment history and current debt status. This will ensure customers are adequately funded and do not get stuck in a debt trap. Banks will be able to use the information found in the credit report to help approve or reject those who are applying for credit. If your repayment history is poor, you may be denied a loan. Finally, banks will use this report to decide what interest rate will be charged on any type of personal loans. Individuals with a good credit history could be eligible for cheaper interest rates while those with a bad credit history may pay more interest as a result of being deemed higher risk.
Having a bad credit history does not mean all is lost if you are in the market for a loan in the UAE. There are a few different things that can be done to improve your credit score. The most important factor is to always make your monthly payments on time. Secondly, in the event of a dispute, make sure to resolve the situation as quickly as possible. Be sure to also keep track of your debt. If you have any credit cards in the UAE that are not being used, close them immediately as your total credit card limit counts against you.