Al Etihad Credit Bureau is the UAE’s federal credit bureau and began operations in the country in November 2014. Despite a few initial teething problems, this service has seen many takers.
The Al Etihad Credit Bureau offers services for individuals, organizations and financial institutions such as banks. They maintain a record of credit histories of almost all operating accounts in the country. A credit report of an account can be requested for by a bank or even an individual by producing the necessary paperwork and paying a small fee.
Most individuals may have certain privacy concerns and they maybe apprehensive about sharing their financial records. People can be rest assured that they have the option of withholding their financial details by signing a form. However, note that a financial organization may refuse to extend a service to you on the grounds that you have not divulged the necessary credit history details.
Another thing that borrowers need to be mindful of is that even though it is not currently mandatory for all banks in the UAE to request a credit report of the borrower and use that as a dominant factor in deciding whether or whether not to approve their request, in the coming years a credit report will matter. Here are a few ways that a credit report will affect your loan application or credit card request with a bank.
Lowers cost of credit for good borrowers
Whether you want to ask for some business finance assistance or a mortgage or even a credit card, an attractive interest rate is always a deciding factor. With the help of a credit report, your credit history will be easily visible to the bank that you apply with. If you have maintained a good credit history and have a credible debt repayment cycle, chances are that the bank that you wish to apply with will offer you an attractive interest rate.
Encourage better debt management
Once you realize that your financial transactions and their regularities or irregularities have an effect on your credit score, you will automatically start planning your finances better. This will mean that you use your capital resources as well as assets well, which will eventually result in a credible credit report. A credible credit report clubbed with the ability to manage your finances well will increase your chance of your loan or credit card application getting approved faster.
Allow transparent transactions
When you apply with a bank or financial organization and ask to avail a certain service or multiple services, the ultimate discretion of extending that service to you lies with the bank. In case of a refusal of service, borrowers are often left bereft of an explanation as to why their request got rejected by a particular bank. Credit reports will help solve this discrepancy as banks will have the credit report to explain their refusal and borrowers will have the credit report to advocate their request better.
Open more financial options
As consumers, it often happens that we pick and avail services that satisfy our immediate needs or even choose certain financial products as per as our day to day requirements. This makes us miss out on certain updated products and services, the benefits of which may be unknown to us but can be of great use to us. When you make your credit history available to banks they may recommend certain such products that will prove beneficial to you. Therefore, credit reports open up more financial options for you.