190927 credit score
UAE's Al Etihad Credit Bureau has expanded the scope of its Credit Score by adding bill payment history into the calculations. Image Credit: Shutterstock

Dubai: More than 90 per cent of individuals and businesses in the UAE will be covered by ‘credit scores’ under a new calculation introduced by Al Etihad Credit Bureau. There are 13 million individuals and businesses registered under the UAE credit score entity.

Earlier, the credit score extended to 70 per cent of those registered, and which will now be raised to 90 per cent. “30 per cent of the individuals and companies listed in the AECB credit registry were non-scorable due to lack of borrowing history,” said Marwan Lutfi, CEO of Al Etihad Credit Bureau.

“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.”

The alternative/additional data introduced in the credit score calculation uses monthly salary history, cheque clearance history, telecom 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 ‘automatically have a credit history’.

How the new credit score will show up
Companies and individuals who purchase credit reports through AECB’s website, mobile app or customer centres will see a 'credit score' appear in these reports.

The Al Etihad Credit Bureau is the sole entity for maintaining a credit registry which 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.