Missing a rental payment or service fee will soon hit your credit score in the UAE

Etihad Credit Bureau to soon add property payments to its credit scoring system

Last updated:
Manoj Nair, Business Editor
2 MIN READ
Credit score ratings have become an integral feature for UAE residents wanting to take loans, etc. Now, a major addition will be made in how the scores are calculated.
Credit score ratings have become an integral feature for UAE residents wanting to take loans, etc. Now, a major addition will be made in how the scores are calculated.
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Dubai: Residents in the UAE will soon have payments related to their properties included in their credit score – whether that’s a rental payment or, in the case of property owners, their services charges.

Currently, the credit score in the UAE is based on how individuals fare on their loan or credit card commitments, timely clearing of monthly bills to their telecom service providers and utility companies.

Bringing property-specific payments under the UAE credit score means a significant step up for individuals in making payments and on time.

It’s based on these credit scores that the Etihad Credit Bureau oversees that banks take decisions on whether they should be lending to an individual (or business). Just as important, if they decide to lend, the scores come in handy to set the level of funding they can provide.  

“If someone’s not making a payment on their property service charges, it should go into part of their credit behavior,” said Marwan Ahmad Lutfi, Director-General of Etihad Credit Bureau. “This is how it is in mature consumer markets, and we expect to introduce the property payment part.  

“We are working with the land departments in each of the emirates or other regulatory bodies. We are collecting data in a very secure manner and analyze it. This means we are looking at rental obligations and whether there have been missed payments. Or whether such issues have been taken up by (or against) the individual with the rental dispute resolution courts or committees.”

First rents, then service charges

The way Etihad Credit Bureau is mapping out the new add-ons to the credit scoring, rental payments will be added first and then followed by service charge obligations meant for property owners.

What this does is tighten up all the payment requirements that individuals have made with entities or landlords – and make sure they are aware of where they stand on their credit scores if they miss any payments.

There will also be a third element – payments committed to by an offplan property buyer.

“We believe offplan payments are just as important to be tracked on the UAE credit score,” said Lutfi. “Some of the risks associated with non-payments by buyers have been communicated to us by developers.

“Sure, it’s easy for the developers to take back those properties in case of defaults. But if there are ways to avoid the legal issues associated with those properties, it’s good for the individual, the developer and the economy. Those are the angles we are trying to look at by expanding the scope of the credit score to offplan payments too.”

Manoj Nair
Manoj NairBusiness Editor
Manoj Nair, the Gulf News Business Editor, is an expert on property and gold in the UAE and wider region, and these days he is also keeping an eye on stocks as well. Manoj cares a lot for luxury brands and what make them tick, as well as keep close watch on whatever changes the retail industry goes through, whether on the grand scale or incremental. He’s been with Gulf News for 30 years, having started as a Business Reporter. When not into financial journalism, Manoj prefers to see as much of 1950s-1980s Bollywood movies. He reckons the combo is as exciting as it gets, though many will vehemently disagree.

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