ABU DHABI - Al Etihad Credit Bureau (AECB) has announced the addition of 'Expense to Salary Ratio' (ESR) to its credit reports.
ESR appears as a indication of an individual's payment obligations against the reported monthly salary, thus serving as an additional parameter in assessing creditworthiness and affordability for individuals and banks alike.
Marwan Ahmad Lutfi, Chief Executive Officer of AECB, explained that credit reports are a direct reflection of an individual’s appeal and payment behavior to lenders such as banks and financial institutions, but are also as important for other entities such as property managers and telecom service providers.
"The addition of the ESR to the AECB reports is a natural step in our ongoing path towards generating data-driven insight for lenders to assess the credit worthiness of individuals, while taking into consideration their regular non-banking monthly payment obligations, such as utility bills, and telecommunication bills. Moreover, ESR helps to clarify one's affordability rating by showing the total monthly payment obligations reported to the bureau as a percentage of their reported salaries," Lutfi said.
He added, "ESR does not only provide banks and credit report users with insight on the individual’s spending behavior, but is also a barometer for individuals themselves that will allow them to gauge their own spending habits and consider a more financially responsible alternative should their ESR be less than ideal."