Can Unpaid Debts in Dubai Affect a Person’s Credit Score or Financial Record?

 

Yes, unpaid debts in Dubai can have a significant impact on a person’s credit score and financial record, especially with the increasing integration of credit reporting systems in the UAE. Maintaining a clean financial record is essential, as it directly affects an individual's ability to access future credit, open bank accounts, or secure loans and mortgages.

1. Credit Reporting in the UAE

The Al Etihad Credit Bureau (AECB) is the official credit reporting agency in the UAE. It collects and maintains credit information from:

  • Banks and financial institutions

  • Telecommunications providers

  • Government agencies

This data is used to generate a credit report and a credit score for individuals and businesses, reflecting their payment behavior and debt obligations.

2. How Unpaid Debts Are Reported

When a person fails to repay debts such as:

  • Personal loans

  • Credit card bills

  • Auto or mortgage loans

  • Telecommunications dues

…the lender reports the missed or delayed payments to the AECB. These records stay on file and negatively impact the debtor’s credit profile.

3. Consequences of a Poor Credit Record

A low credit score due to unpaid debts can result in:

  • Rejection of new loan or credit card applications

  • Higher interest rates on any approved credit

  • Difficulty renting property or obtaining utility connections

  • Employment issues, especially in financial or government sectors

  • Restrictions on future borrowing, even for small amounts

4. Debt Collection and Credit History

When a case enters formal debt collection—either through an agency or the courts—it is likely to be flagged as a serious default. This adds to the damage on the credit report, even if the amount owed is eventually paid later.

5. How to Repair the Credit Record After Debt Repayment

Once the debt is settled:

  • The creditor should update the AECB with the payment confirmation

  • The debtor can request a credit report correction if the update is not reflected

  • Over time, the credit score will gradually improve with consistent on-time payments and responsible financial behavior

Note: Credit information remains on record for 5 years, even after settlement.

6. Preventive Measures to Protect Credit Score

  • Pay debts and bills on or before the due date

  • Avoid exceeding credit limits

  • Communicate with creditors early in case of financial difficulty

  • Regularly review credit reports from AECB to spot errors or missed updates

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