UAE's Al Etihad Credit Bureau (AECB) will introduce new credit scores to cover more than 90% of the 13 million individuals and companies present in its credit registry, up from 70% previously.
As financial institutions rely on AECB's data to make informed decisions regarding their customers, the new initiative is expected to help a broader number of individuals and companies to build a credit history and leverage from a range of products. "Even customer without bank borrowings will be scored based on other factors," AECB said in a statement.
Marwan Lutfi, Chief Executive Officer of AECB, explained: "Previously, approximately 30% of the individuals and companies listed in the AECB credit registry were non-scorable due to 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 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.
(Writing by Seban Scaria; editing by Daniel Luiz)