Al Etihad UAE credit bureau to add monthly expense-to-salary ratio in credit reports for loans

This will provide an indicative figure of the individual’s monthly payment obligations relative to their salary. This will serve as an “additional metric” to measure that person’s creditworthiness. And so the additional loan exposure will be affordable. The ratio helps lenders understand a person’s affordability score by showing the total monthly payment obligations reported to the UAE credit bureau as a percentage of their reported salaries.

ESR statements will also be important in a resident’s dealings with their property manager as well as the telecom provider. “Adding ESR to AELC reporting is a natural step in our continued journey towards generating data-driven insights for lenders to assess the creditworthiness of individuals,” said Marwan Ahmad Lutfi, CEO of the AECB.

The value is shown as a percentage ranging from 0 to 100+ percent and indicates the individual’s financial obligations as a proportion of their salary. Information for the ESR takes into account active credit facility disbursements, credit card limits, and telecommunications and utility charges. The person’s salary is provided by the banks as part of regular data submissions to the AECB.

“Credit reports directly reflect an individual’s attractiveness and payment behavior to lenders such as banks and financial institutions, but are also important to other entities such as property managers and telecommunications service providers,” added the CEO.

Banks have tightened lending criteria across the retail spectrum and will do so more. Recently, the UAE credit agency came up with a feature that would give a likely indicator on the chances of a check bouncing.

The ESR not only provides banks and credit report users with insight into an individual’s spending behavior, but is a barometer for individuals themselves that will allow them to assess their own spending habits and – hopefully – to consider a more financially responsible alternative if their ESR is lower. that ideal

– Marwan Ahmad Lutfi, CEO of Al Etihad Credit Bureau