Posted by: islamicfinancingnews | August 16, 2012

Good credit is an important part of Islamic loans

Many people are concerned with having good credit because a good credit rating can greatly increase your chances of qualifying for Islamic loans free of Riba to buy a home or apply towards other types of household purchases.

Generally, a good credit rating means that you have paid back previous loans or credit balances in a timely manner and continue to do so my making the required payments on current outstanding loans or credit balances on time. FICO scores are the most widely used credit scores and will help your Islamic finance lender to asses not only your capacity to repay a loan based on your debt-to-income ratio, but also your readiness to repay a loan based on your personal credit score.

Keep in mind, a credit score that reveals past delinquent payments or poor payment patterns can be repaired. For example, even though previous late payments may have lowered your score, you can improve it by getting in the habit of making at least the minimum payment due on current accounts promptly each month. Request and review the free credit report credit bureaus are obligated to provide annually to ensure your information is accurate and up-to-date.

Talk to your lender about ways to maintain good credit and the different Islamic finance options that are available to borrowers with a good credit rating.

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