It’s estimated that the average debt load of a household in the UAE is $95,000 based on the 2013 research by Strategic Analysis. With living costs increasing every year, residents can struggle to make ends meet especially if they aren’t careful about how much debt they can afford to take on.

To prevent consumers from falling into a debt trap and regulate lending in the UAE, Al Etihad Credit Bureau was launched in November 2014. The Bureau offers credit reports to both lenders and consumers, allowing both parties to get an insight into a consumer’s credit history and make well- informed financial decisions.

[Related: UAE credit reports explained]

In an exclusive interview, CEO of Al Etihad Credit Bureau, Marwan Ahmad Lutfi told, “The information we provide in our reports is a pure reflection of the data coming from the banks. We have 56 data providers including banking sector and finance companies working with us and the completeness of our credit information data is around 99 percent.”

How has Al Etihad Credit Bureau performed since launch?

It is no wonder that since the launch of the Bureau, increasing number of financial institutions are opting to use the reports, giving them a better idea on the borrower’s credit history and if they will be able take on more debt.

Lutfi adds “Al Etihad Credit Bureau’s performance can be considered to be the best in the world by a credit bureau in the span of one year since launch. Our next phase is to ensure data consistency in compliance with our data framework so that we can enhance the reliability of the credit reports even further.”

How aware are UAE residents about the Bureau’s services?

Even among consumers, awareness about the Bureau has increased since launch. In a survey conducted by YouGov in partnership with Al Etihad Credit Bureau and Citibank UAE, it was revealed that 32% of respondents knew about the credit report services provided by Al Etihad Credit Bureau. Among these, 24% had also acquired the credit report.

[Related: Worried about your credit report? Here’s how you can improve it]

However, there is room for improvement as residents still lack enough financial education to take full advantage of the services provided by the Bureau. A recent poll found that almost 80% of respondents didn’t know how to calculate their Debt Burden Ratio, a vital aspect in calculating your loan repayments and managing your finances.

Calculate your Debt Burden Ratio

What should consumers be aware of going forward?

“The first step to having healthy finances is to know your total outgoing monthly payments. Be aware of your financial obligations as there is a difference between affordability and ability to pay”, advises Lutfi.

He adds, “If you want to maintain a healthy credit report, ensure that you update your personal information with the banks you deal with, especially your Emirates ID, as it may affect your ability to get a loan in the future.”

Future plans for the Bureau in 2016 will include online credit report sales, credit scores and industry reports. Debt-conscious consumers should therefore pay greater attention to their payment behavior and overall indebtedness as credit reports are here to stay.