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CONSUMER CREDIT bureaux and their uses.

Summary: AL ETIHAD CREDIT BUREAU, BASED IN THE UAE, EXPLAINS WHAT THE BENEFITS OF HAVING A CONSUMER CREDIT BUREAU ARE

Credit bureaux play an important role in assessing a debtors' ability to pay back debt, and the likelihood of defaulting on loans. The UAE's Al Etihad Credit Bureau provides credit reports for individuals and companies, which, ultimately can make it easier for SMEs to access credit, if they have a good track record as a debtor. Saudi Arabia has its SIMAH Credit bureau, providing the same services.

What is a credit bureau and what does it do?

Al Etihad Credit Bureau adds tremendous value to the UAE's financial sector by enabling institutions to make informal decisions, whilst helping individuals and corporations to understand their current financial obligations, debt level and creditworthiness. For SMEs in particular, access to such information is critical to their growth and success.

Al Etihad Credit Bureau is actively working with financial institutions to collect credit data on individuals and companies, with plans in place to collaborate with utilities, government, and other organisations in the future. Facilitating the monitoring of UAE lending practices in real-time, Al Etihad Credit Bureau will also stabilise and enhance transparency across the country's economic sector, improving the profile of the UAE's consumer credit market and the country's global competitiveness.

How can companies request a credit report and what do they need to submit to get one?

Commercial bureau reporting services will provide full and up-to-date credit information on commercial organisations in the country.

The reports allow UAE companies to check if the information held by banks is accurate. This is important, as a strong credit history will give access to better terms and conditions with banks, lenders and utility providers and will make it easier for companies to gain access to capital.

For a company to obtain a credit report, they should visit our customer service centre in Abu Dhabi or Dubai and provide the following documents:

* Original Emirates ID card of the establishment's owner or the company's authorised signatory.

* Trade licence of the company/ establishment.

* The Articles of Association of the company

In the case of authorisation, one must bring the following:

*Copy of valid Emirates ID card of the establishment's owner or the company's authorised signatory.

* Trade licence of the company/ establishment.

* The Articles of Association of the company.

* Original Emirates ID card of the authorised person.

* Original notarised Power of Attorney acceptable to Al Etihad Credit Bureau or the authorisation letter to include authentication of the establishment's owner of the company's authorised signatory from a bank.

*Credit Report application form duly filled in.

What are the benefits of having a credit bureau rating?

Credit suppliers favour individuals and corporates with a good credit report and offer them better access to capital, including lower interest rates. Defaults, bounced cheques or a large number of credit facilities, negatively impact an individual. However, there is always room to improve in the long run, by paying bills on time, meeting financial commitments and/or reducing the number of credit facilities that an individual has.

The credit reporting system will reduce credit losses from bad or non-performing debts, and allow those who maintain a good credit rating to benefit from greater access to capital and better interest rates. Ultimately, these measures will improve the profile of the UAE's consumer credit market and the country's global competitiveness.

Why does a company need a credit history?

Companies will also be able to manage their suppliers; by understanding the creditworthiness of their suppliers will ensure they are dealing with creditable suppliers. Also understanding the credit worthiness of their clients will help them manage the terms and conditions they offer them.

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Publication:financeME
Date:Sep 28, 2015
Words:627
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