Where to turn when your UAE credit rating goes bad

A resident applied for a credit card but was rejected due to a low credit rating and was told to apply to the Central Bank.

What is the procedure to change a credit rating if the rating is based on past issues. I had a case in 2013 from a bank regarding my credit card but it was settled immediately. Since then I have only used one bank for all my needs and have maintained healthy records. I then applied for a credit card from another bank but was rejected due to my low credit rating. I was told to apply to the Central Bank to change my rating. How do I do that? HM, UAE

Expert 1

Kunal Malani, head of customer value management, HSBC ME

Since it was conceptualised, the Al Etihad Credit Bureau (AECB) has aimed to improve borrowing and lending activities in the country. As it is still a relatively new institution, the data used to derive individuals’ credit ratings is still in the process of being formalised, and there may be instances where there are gaps in information. In recognition of this, the AECB has implemented a robust mechanism that allows individuals to address any outdated issues related to their records.

There are usually two scenarios that come up when individuals need to dispute their credit ratings. The first appears to be what HM is facing, wherein the card in question was settled, but it is still reported as being overdue because it was not closed properly.

In this case, the customer needs to initiate a dispute claim via the AECB or the relevant bank directly – not the Central Bank – and request the corrective feed to be sent on the actual status of the card. To do so, the individual may need to provide supporting evidence in the form of payment receipts, clearance or no-liability letters to prove the settlement. Once assessed and approved, the bank will indicate to the Bureau that the card is closed and that there is no outstanding balance. Once this is accepted by the AECB, it will be reflected in the newly generated report. The process takes approximately 15 business days.

The second scenario that we occasionally see is related to a card that was reported as delinquent and was eventually settled, but the full record of this has not been made. As a result, if a financial institution rejects an application due to this reason, the customer can provide evidence that the card in question has been settled by showing clearance and no-liability letters, in addition to supporting documentation to help their case. In this instance though, the final decision will be at the new bank’s discretion.

Additionally, banks in the UAE are obliged to report customers’ information to the Central Bank of UAE. In the event that the credit rating is related to the Central Bank, it can be due to several reasons such as delayed payments, instalments in arrears, legal cases, etc. In all scenarios, the customer can provide evidence that the card in question has been regularised or has been settled by showing clearance and no-liability letters. These factors will be reviewed by the bank at their own discretion.

Expert 2

Ambareen Musa, founder and chief executive of Souqalmal.com

Start by obtaining your credit report from AECB to verify your historical credit data. The bureau has a system in place through which you can dispute data shown on your credit report. If you see an error on your report, you can register a dispute and provide the relevant documents to support your case, such as account/car/loan statements from the bank. The bureau will verify this information with the bank and provide you with a resolution usually within 20 working days. If your claim is verified, the disputed information will be amended in their database and reflected in your future credit rating.

To obtain a credit report, you should visit the customer service centre at AECB and apply for the credit report. You will need your original Emirates ID, passport copy and the credit report application form. You can either request a short copy of the credit report for Dh70 or a detailed copy for Dh110.

Next question:

I want to invest in UK property but is now a good time, following the fallout from Brexit? I am not British so do not plan to live there. MM, Dubai

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