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Mon 8 May 2017 08:09 PM

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First Dubai bank uses credit scores for loan applicants

Emirates NBD says is first to process loans using Al Etihad Credit Bureau Consumer Retail Banking Score

First Dubai bank uses credit scores for loan applicants
(Getty Images)

Emirates NBD, Dubai's biggest bank, has announced that it is the first bank in the UAE to process loan or card applications using the Al Etihad Credit Bureau (AECB) Consumer Retail Banking Score.

The AECB Consumer Retail Credit Bureau Score is the first scoring system for UAE’s retail banking customers, exclusively developed for risk prediction using historical data on repayment behaviour reported to Al Etihad Credit Bureau.

The Credit Bureau Score is a three-digit number, ranging from 300 to 900 with a lower score indicating a higher risk and likelihood of missing loan or card payments.

Credit scoring, common in mature markets, is a statistical methodology used to assess risk and forecast the likelihood of timely payments based on a customer’s past behaviour.

“We are delighted to be the first bank in the UAE to link our interest rates and eligibility on loans and credit card limits to the AECB Consumer Retail Credit Bureau Score,” said Suvo Sarkar, senior executive vice president and group head – Retail Banking and Wealth Management, Emirates NBD.

“Credit scoring is a tested risk assessment tool, in line with international best practice and this initiative will bring greater transparency and efficiency in the way money is borrowed in the UAE.”

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Frequent Flyer 2 years ago

This is similar to the US credit scoring system, one downfall with it is that to receive a score an individual must incur debt. A dangerous proposition if sound saving practices are not part of the individual's lifestyle.