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Expats working in UAE to face credit rating checks when borrowing
| Published: | 29 May at 6 PM |
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A new UAE government ruling will introduce comprehensive credit rating checks for expats hoping to borrow money.
Although it’s taken five years to get up and running, the new Al Etihad Credit Bureau is now running its first credit checks on potential borrowers following last week’s announcement of the new law by Sheikh Mohammed bin Rashid. The facility has been welcomed by the emirate’s banks, lenders and credit card providers for its ability to promote due diligence and avoid non-performing loans.
Data required by the bureau includes any defaults on previous loans and any court judgements against the customer during the previous five years. Mortgages and other investments held by prospective borrowers will not be taken into account.
Until now, there have been no formal checks and balances as regards clients’ credit histories available to lenders, leaving them in a difficult position as regards the risk of being taken advantage of by less than honest customers. The bureau will offer information to foreign companies registered in the emirate, banks, professional and commercial organisations and the government.
Data has been collected since last month, with local banks and other financial institutions asked to provide customer IDs and credit details stretching from late 2011 to the present day. Customers whose requests are refused can query credit report errors, and a number of banks are delaying the handing over of the requested information.
Full declarations have been given as requested by the National Bank of Fujairah, but other banks have presented incomplete information or none at all. The sector’s trade body is refusing to comment at present.
Although it’s taken five years to get up and running, the new Al Etihad Credit Bureau is now running its first credit checks on potential borrowers following last week’s announcement of the new law by Sheikh Mohammed bin Rashid. The facility has been welcomed by the emirate’s banks, lenders and credit card providers for its ability to promote due diligence and avoid non-performing loans.
Data required by the bureau includes any defaults on previous loans and any court judgements against the customer during the previous five years. Mortgages and other investments held by prospective borrowers will not be taken into account.
Until now, there have been no formal checks and balances as regards clients’ credit histories available to lenders, leaving them in a difficult position as regards the risk of being taken advantage of by less than honest customers. The bureau will offer information to foreign companies registered in the emirate, banks, professional and commercial organisations and the government.
Data has been collected since last month, with local banks and other financial institutions asked to provide customer IDs and credit details stretching from late 2011 to the present day. Customers whose requests are refused can query credit report errors, and a number of banks are delaying the handing over of the requested information.
Full declarations have been given as requested by the National Bank of Fujairah, but other banks have presented incomplete information or none at all. The sector’s trade body is refusing to comment at present.
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