Al Etihad Credit Bureau (AECB) has announced that the Credit Score will be further enhanced to increase the scoring capability to over 90% of the 13 million individuals and companies present in its credit registry – up from 70% previously.
The alternative data sources used in the updated Credit Score calculation allows a broader number of individuals and companies to build a credit history in the country, thereby benefitting from a range of products and benefits offered to customers as now, even customer without bank borrowings will be scored based on other factors.
“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.
He added, “It is an imperative for us to continuously upgrade our methodologies, and inclusivity is key to that aim.
Previously, approximately 30% 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.”
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 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.