‘Will a missed loan payment affect my UAE credit report?’

The Al Etihad Credit Bureau's data is used by banks and other lenders to assess applications for credit. Silvia Razgova / The National

Question: You recently wrote about credit scores in the UK, but I have a question about credit scores and records in the UAE. I think a system to keep details was set up a few years ago but is it used and does it make any real difference?

I was late making a few payments on a loan four years ago during Covid but am hoping to take out a mortgage before long. GN, Ras Al Khaimah

Answer: The Al Etihad Credit Bureau (AECB) was set up in 2012 and started providing credit reports in November 2014.

It holds information from banks, credit card and financial companies, lending houses, telecom and utility companies, the UAE courts and more.

It is now used by banks and other lenders to assess applications for credit, that is for mortgages, loans and credit cards, alongside other information such as a salary. As well as payments missed or made late, it records any bounced cheques and has information on credit card usage.

Each person has a credit score, a three-digit number, that is a prediction of how likely they are to meet their credit commitments on time.

The number ranges from 300 to 900. The higher the score, the lower the risk rating. You want a high score to obtain credit and at the best rates of interest. A score of 700 is considered good and 300 to 540 is poor.

Everyone can check their own credit score by requesting a credit report at a cost of Dh84 for an individual. It can be obtained through the website or by downloading the AECB app.

The records are held for a period of three years so it may be that the late payments from 2021 may not be relevant, but it would be sensible to check your personal report.

It should be noted that if there are any errors, there is a system in place for reporting and correcting them.

Q: I have a golden visa as my husband and I own a property in Dubai. I haven’t worked for a while, since before the visa change. I think I can work with this visa but is it possible to work for two companies? I have an option to do two days’ work each week for two different companies, but I don’t know if I can or how. PH, Dubai

A: A person must have a residence visa to undertake any employment in the UAE. PH has a golden visa, so that means an employer does not need to arrange one for her. The other requirement is to have a work permit, also known as a labour card. All employers must provide this for every single employee, whether they are sponsored or not.

PH can work part-time for two employers, or even more, but each one must provide her with a work permit for the relevant work and a contract of employment that will be registered with the Ministry of Human Resources and Emiratisation, or the relevant free zone.

Both an employer and the employee are protected in law by doing this properly. Failure to obtain and provide the right work permit can lead to substantial fines for both parties.

Q: I have been offered a job in Abu Dhabi and it has a probation period of three months. The offer letter says the company can extend that for another three months.

I heard from a friend that the rule changed when the labour law changed, so is it legal for the company to keep me on probation for six months or longer? I want to bring my family with me but this is very uncertain and it worries me. RM, Canada

Changes to the UAE's Golden Visa eligibility criteria

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A: Federal Decree-Law Regarding the Regulation of Employment Relationship, Law No 33 of 2021 came into force in February 2022. It contained a number of changes but the laws regarding probationary periods were unchanged.

Article (9) of the law refers to probationary periods: “The employer may appoint the worker under a probationary period not exceeding six months from the date of commencement of work.”

A company is permitted to have a probationary period of three months and then to extend that to six months but no longer than that.

The law goes to clarify: “It is not permissible to appoint a worker under probationary period more than once at one employer, and if the worker successfully passes the probationary period and continues to work, the contract shall become valid according to the agreed terms.”

Having a probationary period is standard practice across all areas of business and I would hope that companies have a robust recruitment system in place to minimise disruption for all parties.

The advice provided in our columns does not constitute legal advice and is provided for information only

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