Al Etihad Credit Bureau and online financial aggregator Policybazaar UAE will carry out real-time eligibility checks for credit card applications based on the credit scores of applicants and banks’ approval criteria.

Under the agreement, customers of Policybazaar UAE will immediately know the chances of their credit card application being approved based on their AECB credit score, which will be pulled automatically from the system, the company said on Monday.

The eligibility checks will help banks approve credit card applications faster, it said.

“This new channel will make our credit scores easily accessible by individuals through [several] digital distribution channels,” said Marwan Ahmad Lutfi, chief executive of the AECB.

“Our system now allows marketplaces, aggregators and potentially any digital platform to integrate with AECB’s systems through APIs. This will enable individuals in the UAE to obtain their AECB credit scores through digital channels, thereby facilitating access to credit information and making the credit score an integral part of business practice.”

Set up in November 2014, the AECB brings transparency to the lending industry by assembling a credit record of the nation’s financially active residents.

It makes use of credit data such as loan, mortgage, credit card and phone bill payments.

The AECB credit score is a three-digit number that indicates how likely customers are to make their payment obligations on time based on their past payment behaviour.

The bureau calculates the credit score using information it collects from financial and non-financial institutions in the UAE. The credit scores range between 300 and 900, with a higher score meaning a lower level of risk.

For instance, if a customer’s score is 300, it means they are defaulting on a payment such as a mobile phone bill, a loan instalment or a credit card payment.

On the other hand, a high AECB credit score – 657 or above is considered low risk – means that a customer’s credit behaviour reflects a lower risk, which translates into easier availability of credit cards and faster loan approvals.

Financial institutions use the credit scores to decide whether an applicant is a good customer to lend to. People with better scores may even receive more preferential rates.

To improve credit scores, customers are advised to make payments on time, avoid bounced cheques, reduce unnecessary debt and lower outstanding balances on credit cards, according to Policybazaar.