UAE Citizens Might see Credit Ratings Improve Within six Months of Clearing Defaults
UAE residents who have settled payment failures may see their credit scores improve under a new assessment method announced by Etihad Credit Bureau on Thursday, depending on their subsequent payments behaviour and overall credit history.
The new method, called Credit Score 3i, aims to present a more complete picture of individuals’ financial behaviour, while broadening credit scoring to qualified persons with short credit histories, including immigrants to the UAE.
Improvements after the settlement of defaults may show up on an individual’s credit score within six months, if they continue to make regular payments and match the model’s parameters, the agency said. But it doesn’t guarantee it will go up this time.
The first range is 300 to 850 for those with established credit histories. The second is between 300 and 650 for qualified people who are new to credit or new to the UAE and have limited credit histories.
The wider coverage is designed to provide a fuller view of people’s financial histories, including those who may not have a long borrowing history.
The new model provides additional information to help banks and other licensed financial institutions assess credit risk and make lending decisions
But the bureau said individual financial institutions have their own regulations and assessment procedures for lending choices.
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