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

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.”

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.”