The launch follows Al Etihad Credit Bureau's roll-out of individual credit scores to UAE residents in April
UAE's Credit Bureau issues commercial credit scores
Al Etihad Credit Bureau (AECB) has started issuing commercial credit scores to UAE businesses, the bureau announced on Wednesday.
Under the system, companies are assigned a three-digit score - between 300 to 900 - that represents their creditworthiness and future risk of default. The higher the number, the lower the risk.
The bureau hopes the roll-out of the service will make it easier for small and medium-sized enterprises to access credit.
“The launch of the Commercial Credit Score will help banks and other commercial lenders to assess the risk from the time of application throughout the entire lending relationship,” said Marwan Lutfi, the chief executive of AECB.
The commercial credit score measures how likely an organisation is to default within the next 12 months and indicates the effectiveness of its current management, the bureau stated.
The score is calculated using financial data from a range of sources, including banks, finance companies and telecom firms.
The launch is another indication of the bureau’s drive to adopt international standards in credit reporting and comes almost four months after the bureau’s credit scoring system was rolled out to individuals.
An individual’s credit score takes into account about 2,000 attributes to determine a borrower’s risk of default over the next 12 months. Attributes include nationality, age, outstanding balances and the number of loans, Mr Lutfi told The National in April.
The bureau said it hoped individual credit scores would result in borrowers with good payment histories receiving better rates when applying for a credit card or loan.
Companies can obtain their credit scores by visiting the bureau’s customer service centres in Abu Dhabi and Dubai, providing documents such as original Emirates ID of the company’s owner or the company’s authorised signatory, an original trade licence and a valid email address.
A standard credit report for individuals or establishments costs Dh100, while the document with a score is an additional Dh50. A credit score only, with no report, for an individual costs Dh60. Standard reports for corporates cost Dh180, or with a score for Dh220.