UAE: Al Etihad Credit Bureau (AECB) announced that the Credit reports will now include an ‘Expense to Salary Ratio’ (ESR). ESR appears as a indication of an individual’s payment obligations against the reported monthly salary, thus serving as an additional parameter in assessing creditworthiness and affordability for individuals and banks alike.

 “Credit reports are a direct reflection of an individual’s appeal and payment behavior to lenders like banks and financial institutions but are also as important for other entities such as property managers and telecom service providers,” explained Marwan Ahmad Lutfi, Chief Executive Officer of AECB. “The addition of the ESR to the AECB reports is a natural step in our ongoing path towards generating data-driven insight for lenders to assess the credit worthiness of individuals, while taking into consideration their regular non-banking monthly payment obligations, such as utility bills, and telecommunication bills. More so, ESR helps understand one’s affordability rating by showing the total monthly payment obligations reported to the bureau as a percentage of their reported salaries.

ESR is indicated as a percentage ranging from 0% to 100+%, representing the individual’s financial obligations as a ratio to their salary. Information for the ESR takes into consideration active credit facility installments, credit card limits and monthly telecom, and utility bills. The individual’s salary is provided by banks as part of the regular data submissions to AECB.

“ESR does not only provide banks and credit report users with insight on the individual’s spending behavior but is also a barometer for individuals themselves that will allow them to gauge their own spending habits and – hopefully – consider a more financially responsible alternative should their ESR be less than ideal,” added Lutfi.

About Al Etihad Credit Bureau

Al Etihad Credit Bureau is a Public Joint Stock Company wholly owned by the UAE Federal Government. The company was established as per UAE Federal Law No. (6) of 2010 concerning Credit Information and its amendments in Federal Decree Law No. (8) of 2020. Al Etihad Credit Bureau is mandated to collect credit information on individuals and companies from financial and non-financial institutions in the UAE. The information is requested, aggregated, stored, analysed, and then produced and distributed through a variety of credit-related products. For more information visit www.aecb.gov.ae or download the AECB app available in App Store and Google Play.

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