The Debt Panel: 'How can I get a write-off status removed from my UAE credit report?'

The Sharjah resident settled an overdue debt last year without realising the deal would later cause issues for him

Illustration by Mathew Kurian
Beta V.1.0 - Powered by automated translation

I am having difficulty with an old credit card debt, which had a total outstanding balance of Dh20,442. My repayments on the card used to be irregular because my company reduced my salary by Dh2,000 — from Dh9,000 to Dh7,000 — as it was in financial difficulty.

When the bank’s collection department called me, they offered a settlement of Dh17,000 and I made the payment towards the liability in June 2018. Because I had another card with the same bank, where my payments were made on time, the bank refused to give me a clearance letter at that point. But they confirmed via email that the card is considered as cleared.

I recently changed my job in the shipping and logistics industry and am in a better position financially. I now earn Dh17,500 and want a consolidation loan to combine all my credit cards into one debt. However, after checking my credit report at the Al Etihad Credit Bureau, I found the status for the settled card was "write-off". I then found that the liability was settled with a write-off amount of Dh3,442.

I told the bank I was willing to pay this to clear the write-off statement from my credit report, thereby boosting my low credit rating. However the bank’s representative says that even if I make the payment, the status will remain at the AECB.

My other debts are: (outstanding balance / monthly payment)

Bank loan: Dh36,162 (monthly payment of Dh4,233)

Credit card 1: Dh36,165 (Dh3,500)

Credit card 2: Dh30,000 (Dh1,500)

Credit card 3: Dh41,680 Dh1,500)

Total: Dh144,007 (Dh10,733 in monthly payments)

I am looking for a single loan to close all my cards and have just one payment. My other monthly expense is Dh2,048 for rent. My wife also works and takes care of the utilities and other expenses.

My issue is: why will the bank not let me pay the Dh3,442 write-off amount, so that my credit report can be amended? I don't want to be considered a default payer so how can I resolve this? SM, Sharjah

Debt panellist 1: Ambareen Musa, founder and CEO of

Write-offs (also known as charge-offs) are often considered one of the most undesirable mentions to have on your credit report.

A "write-off" happens when the bank labels a debt as uncollectible and rolls it over to a debt collection agency. The write-off amount (Dh3,442 in your case) is the outstanding debt that the bank writes off as a loss. Contrary to popular belief, a write-off does not allow you to get off the hook. You're still legally obligated to pay off the remaining balance.

Write-offs (also known as charge-offs) are often considered one of the most undesirable mentions to have on your credit report. It alerts potential lenders about your inability to repay your debts in the past, making it extremely difficult — if not impossible — for you to secure a loan in the future. Needless to say, it has a huge negative impact on your credit score in the process.

Check with the AECB how they treat credit card write-offs once you settle your outstanding liability towards the bank. In the US, for example, it normally remains on the borrower's credit report for seven years. If the same policy applies in the UAE, there isn't much you can do to rectify the situation.

You could reach out to a senior bank representative and offer to settle your outstanding credit card liability in full. Provide all the details of your case and explain that you were unaware of the implications on your credit report when you settled the credit card debt with Dh17,000. Request the bank to remove the write-off status and amend the original credit information provided to the AECB. If you are able to convince the bank, make sure you get the agreement in writing. It would be best to get both the clearance letter and the agreement to amend the write-off status in writing, on the bank's letterhead.

Now that you're in a better position financially, you can explore the debt consolidation option. However, this may only be feasible if you manage to have the write-off entry removed from your credit report. Check with your primary bank first, and see if they offer a loan consolidation facility. This should help reduce your interest payments significantly and help stretch out the loan tenure, making repayment more manageable.

Alternatively, since you have multiple credit cards, consider the balance-transfer option. You can transfer all or the majority of your total outstanding balance to a credit card that offers you a zero-interest rate for an introductory period. Browse the market and check with credit card providers to find the best balance-transfer deal, making sure that you opt for the longest possible zero-rate tenure and lowest upfront fees.

Debt panellist 2: Philip King, head of retail banking at Abu Dhabi Islamic Bank

Given your situation, you should initially pay the Dh3,442 settlement to the bank to clear the outstanding amount that you owe. Following this, obtain a clearance letter from your bank, verifying that you have paid off the outstanding balance on your old card debt. You should also gather all written correspondence between you and the bank that demonstrates your efforts to resolve your borrowing, particularly the email that had previously stated the card should be considered as cleared. Using this, you can subsequently appeal to the Al Etihad Credit Bureau to seek a correction on the write-off status, explaining the misinformation you had received from the bank and that you have now repaid the card in full.

Over the longer term, you can achieve a higher credit score by borrowing within your means and ensuring that you make your repayments in full and on time. The AECB’s score provides guidance to banks and ultimately the decision as to whether to lend to a customer or not depends on the bank and its appetite for risk. Your plan — to obtain a consolidation loan to clear your card borrowings — is the right route for you to become debt free. With a loan, you will be paying lower charges than on your card while simplifying your repayments into a single amount each.

Debt panellist 3: Steve Cronin, founder of

It’s great news you have changed job and are in a more stable financial position. Make the most of it by paying down your debt as much as possible each month, even before you are able to resolve the issue with the write-off.

You do not mention it explicitly, but it sounds like your bank is refusing to grant you a consolidation loan because of the write-off and low credit score. If it is the same bank that caused the problem in the first place, try to talk to someone as senior as possible who has actual decision-making power and explain your situation. If it is a different bank, again you may need to talk to someone senior enough who can take the unusual circumstances into account. Bring the original email conversation with the bank to these meetings.

Other than your credit rating, there seems no reason why you couldn’t get a consolidation loan — it would not bring you over your Debt Burden Ratio as long as the term of the loan is long enough.

Meanwhile, sit down with your wife and develop a two-year plan to become completely debt free. If she can contribute some of her salary to pay down your debt, and reduce general family expenses, it will greatly accelerate progress. Without a consolidation loan, it will be a race against time to pay down extra on your cards before they grow again due to the high interest charges. While making the minimum payments on the loan and cards, start additionally paying off the card with the highest interest first. You have at least Dh4,719 per month left after your minimum payments and rent, so put it to work immediately. Do not spend any more money on these credit cards at all, otherwise you will never escape.

The next year or two may be a bit tough while you pay down your debts, but it will be worth it. See if you can take on extra work with your company, aim for a rapid promotion or even look around in case there is a similar job on offer with another company for more pay. Your wife should do the same — you are in this together. Selling unwanted furniture and other assets may also help. A friend or family member may be able to provide a loan and you could even offer them some interest or profit on the loan, as it will be far below the interest charged on your cards.

Also try to slash your expenses where you can, even if that means changing accommodation and reducing evenings out. Go through your monthly outgoings and be ruthless in stripping out any you don’t really benefit from.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to